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Crude Oil Prices Rapidly Surge As Brent Futures Top USD 110 A Barrel

BY Lynnet Okumu · March 2, 2022 11:03 am

KEY POINTS

International benchmark Brent crude oil futures were up 4.96 percent at USD 110.18 a barrel while US benchmark West Texas Intermediate (WTI) futures were up 4.93 percent at USD 108.51 a barrel.

KEY TAKEAWAYS

Natural gas prices have also increased by 5.39 percent with spot gold, which is typically considered a safe-haven asset, rising 1.82 percent and it last traded at 1,942.21 dollars.

Crude oil prices are up sharply on Wednesday 2nd March 2022, surging nearly 5 percent on concerns of shortage in supply, even after 31 countries agreed to release 60 million barrels of oil from reserves around the world.

International benchmark Brent crude oil futures were up 4.96 percent at USD 110.18 a barrel while US benchmark West Texas Intermediate (WTI) futures were up 4.93 percent at USD 108.51 a barrel.

This price shoot comes after member countries in the International Energy Agency (IEA) on Tuesday agreed to release 60 million barrels of oil from their emergency reserves to send a unified and strong message to global oil markets that there will be no shortfall in supplies as a result of Russia’s invasion of Ukraine.

“Markets dismissed the notion that 60 million barrels of strategic reserves released will be consequential to the risks of Russian supply jeopardized, given Russia pumps more than that in just six days,” Vishnu Varathan, Mizuho Bank’s head of economics and strategy, said in Wednesday note.

ALSO READ: Rise in Global Wheat Prices Likely Push Bread to Ksh.67

He further added that the Inflation risks have not in any way receded, arguing that if anything, it has been brutally accentuated by supply shocks posed by Russia.

On Thursday 24th February 2022, crude oil hit USD 100 a barrel for the first time in over seven years after Russian President Vladimir Putin announced a military assault against Ukraine.

An analyst, Amrita Sen from consultancy Energy Aspects, had predicted that Brent crude prices would go back above 100 dollars and probably return to the highs of 105 dollars. She further added that there’s also a possibility it could jump to 110 dollars.

Natural gas prices have also increased by 5.39 percent with spot gold, which is typically considered a safe-haven asset, rising 1.82 percent and it last traded at 1,942.21 dollars.

Kenyans, who are currently choked by the increased food prices, should prepare for soaring fuel prices and a further rise to the food bills amid the crisis in eastern Europe. The effect will spill off and hike transport prices, energy bills, and the cost of manufactured goods.

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