Oil up 2% after Russia-Ukraine missile exchange, outweighing US crude stock rises
Oil prices rose more than 2 percent on Thursday as Russia and Ukraine fired missiles at each other, overshadowing the impact of a larger-than-expected increase in U.S. crude inventories.
Brent crude futures were up $1.48, or 2.03%, at $74.29 by 1158 GMT. U.S. West Texas Intermediate crude futures were up $1.53, or 2.23 percent, at $70.28.
Ukraine fired British cruise missiles at Russia on Wednesday, the latest Western weapon authorized to be used in such a way, a day after it fired US missiles.
Russia retaliated early Thursday by launching an intercontinental ballistic missile over Ukraine, the first time Moscow has used such a powerful, long-range missile during a war, Kiev’s air force said.
Russia has said the use of Western weapons to attack its territory across the border would be a major escalation of the conflict. Kiev says to defend itself it must be able to attack Russian bases used to support Moscow’s offensive, which entered its 1,000th day this week.
“For oil, the risk is if Ukraine targets Russian energy infrastructure, while another risk is uncertainty over how Russia responds to these attacks,” ING analysts said in a note.
China on Thursday announced policy measures to boost trade, including support for imports of energy products, amid concerns over US President-elect Donald Trump’s threats to impose tariffs.
Meanwhile, OPEC+ could push back production hikes again at the Dec. 1 deadline because of weak global oil demand, three OPEC+ sources familiar with the talks said.
The production group, which combines the Organization of the Petroleum Exporting Countries and allies such as Russia, pumps half the world’s oil. It initially planned to gradually reverse production cuts through late 2024 and 2025.
However, the International Energy Agency (IEA) has said that if OPEC+ cuts continue, oil supply will still exceed demand in 2025.
Weighing on the market was a 545,000-barrel increase in U.S. crude inventories to 430.3 million barrels in the week ended Nov. 15, which exceeded analysts’ expectations.
Gasoline inventories rose more than forecast last week, while distillate stockpiles posted a bigger-than-expected draw, according to Energy Information Administration data.
