Oil rose to its highest since 2014 yesterday after Moscow ordered troops into two breakaway regions in eastern Ukraine, adding to supply concerns that are pushing prices towards $100 a barrel.
Brent crude, the global benchmark, was up $1.93, or two per cent, at $97.32, having earlier reached its highest since September 2014 at $99.50.
United States’ West Texas Intermediate (WTI) crude jumped by $2.96, or 3.3 per cent, from Friday to $94.03, with the market having been closed on Monday for a public holiday. WTI also touched a seven-year high on Tuesday as it peaked at $96.
Germany put the certification of the Nord Stream 2 gas pipeline from Russia on ice while the United States (US) and European Union (EU) discussed potential sanctions as Ukraine reported continued shelling in east Ukraine.
“The potential for a rally over $100 a barrel has received an enormous boost.
“Those who have bet on such a move anticipated the escalation of the conflict, ” said Tamas Varga of oil broker PVM.
Julius Baer analyst, Norbert Rucker, added: “We see the oil market in a period of frothiness and nervousness, spiced up by geopolitical fears and emotions.
“Given the prevailing mood, oil prices may very likely climb into the triple digits in the near term.”
In the meantime, the Federal Government has declared its intention to invest and focus attention on natural gas exploitation in the country.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, stated this yesterday at the Sixth GECF Summit in Doha, Qatar, where represented President Muhammadu Buhari.
The Senior Adviser (Media & Communications) to the minister, Horatius Egua, made this known in a statement.
The aide said: “The recent enactment of the Petroleum Industry Act (PIA) is an indication of our commitment to derive more value from natural gas by providing the required governance, regulatory and fiscal framework to support the growth of the industry.”