Jump to content

Crude Oil Prices Jump as Russia Attacks Ukraine, Fighting May Be Brief


Recommended Posts


  • Crude oil prices soar to 8-year highs as Russia attacks Ukraine, threatening supply
  • Mirroring 2008 Russo-German War may mean the fighting is relatively short-lived
  • Risk-off flows likely to remain near-term, WTI on pace to challenge $100/bbl figure
Russia-Ukraine crisis: What a war could mean for the Indian economy |  Latest News India - Hindustan Times

Crude oil prices raced higher as Russia attacked Ukraine, driving a violent risk-off move across global financial markets and stoking energy supply disruption fears. Russia is the world’s third-largest exporter of oil and the largest producer of natural gas. About a third of that gas output flows through Ukraine.

The WTI benchmark is testing above the $97/bbl figure while the Brent contract has extended above the $100/bbl mark for the first time since mid-2014. A Bloomberg index of energy commodity prices including crude, gasoline, heating oil and natural gas jumped to the highest in over 3 years.

Asia-Pacific stock exchanges shed nearly 2 percent after news of Russia’s incursion and the subsequent outrage from the international community, with loud promises of retaliatory sanctions from the EU and the US. European markets are down over 3 percent in early trade and US index futures point sharply lower.

This hints that headlines tracking the crisis are likely to remain in focus for now, helping to sustain upward momentum. Nevertheless, stark similarities between the current episode and the 2008 Russo-Georgian war hint that acute instability may give way to an uneasy simmer relatively quickly.


In that engagement, Russia was content to establish a buffer zone between it and Georgia by way of providing military cover for the secession of two breakaway territories, Abkhazia and South Ossetia. Once Moscow effectively destroyed its neighbor’s ability to militarily resist that outcome, it pulled its troops back.

Something similar may now be in play with the separatist Luhansk and Donetsk regions in eastern Ukraine. The Kremlin appears to be acting to prevent Kyiv from resisting their becoming would-be autonomous buffer areas. Once that goal is achieved, fighting at scale may cease. In Georgia, this took two months.



WTI is testing above resistance in the 95.34-82 area marked by the mid-February swing top and the 23.6% Fibonacci extension. A daily close above this barrier may set the stage for a test of the $100/bbl figure. Alternatively, a reversal back into this month’s choppy range sees keep support begin at 87.46.

WTI crude oil price chart

Crude oil price chart created using TradingView


--- Written by Ilya Spivak, Head Strategist, APAC for DailyFX. 24th Feb 2022

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Posts

    • Sainsburys full year earnings and Unilever’s first quarter trading update both say the same thing, UK consumers are in for higher prices. The war in Ukraine, supply chain issues and the effects of ongoing Covid all to blame.      
    • US Dollar (DXY) Daily Price and Analysis US Q1 GDP may stall the greenback’s advance. A 20-year high nears for the US dollar. The multi-month US dollar rally continues with the greenback printing a fresh high today ahead of the first look at US Q1 GDP at 12.30 GMT. The US dollar basket (DXY) has been boosted by renewed weakness in the Euro and the Japanese Yen, as investors move from lower-yielding to higher-yielding currencies, while safe-haven flows continue to benefit the greenback. The US growth release later in the session is expected to show a sharp slowdown from the robust Q4 figure of 6.9%. The markets are currently pricing in growth of just 1% for the first three months of this year, with the slowdown mainly due to a reduction in inventory accrual over the quarter. This release is unlikely to move the greenback, unless there is a large miss or beat, as the Fed believe that 2022 US growth will be robust enough to let them tighten monetary policy sharply without damaging the economy. The latest US Core PCE data – the Fed’s preferred inflation reading – is released on Friday and this may have more effect on the US dollar than today’s GDP data. For all market moving economic data and events, see the DailyFX Calendar. The ongoing US dollar rally has been aided by weakness across a range of G7 currencies including the Euro, the Japanese Yen, and the British Pound. The Euro continues to battle with lowly growth expectations, exacerbated by energy concerns, the British Pound is mired by weak economic data, while the Japanese Yen is in freefall as the BoJ continues with its ultra-loose monetary policy.   The US dollar continues to press higher and looks set to break above 103.96, the March 2020 high. Above here the US dollar would be back at levels last seen nearly two decades ago. The March resistance will likely hold in the short-term, especially with month-end portfolio rebalancing at the end of the week, but US dollar strength is set to continue in the months ahead. USDOLLAR (DXY) WEEKLY PRICE CHART – APRIL 28, 2022 {{THE_FUNDAMENTALS_OF_BREAKOUT_TRADING}} What is your view on the US Dollar – bullish or bearish?   Apr 28, 2022 | DailyFX Nick Cawley, Strategist
    • While Tesla has nothing directly to do with Elon Musk buying Twitter - TSLA stock closed down 12% on news that Musk may have to sell stock and use other holdings to stand against the loan to finalise the purchase of the social media giant.        
  • Create New...