Oil futures surged on Wednesday as escalating violence in Ukraine revived fears that the West could slap Russia with additional sanctions.
On the New York Mercantile Exchange, June delivery light sweet crude added 72 cents or 0.7% to $102.16 per barrel. ICE Futures Europe’s Brent crude traded at $110.01 per barrel after advancing 90 cents or 0.8%.
Front-month Reformulated gasoline blendstock (RBOB) for May rose to the highest intraday price since July 22, 2013 to trade at $3.1128 per gallon.
Ukrainian authorities said up to five militants supporting Russia had been killed in eastern Ukraine. At the same time, Russian President Vladimir Putin said there would be repercussions for use of violence on Ukrainian citizens, according to Wall Street Journal.
US President Obama said his country was prepared to slap more economic restrictions on Russia.
The US and European Union have already put Russia and some Ukrainian officials on sanctions, but Russian energy shipments have not been affected so far. Russia is the world’s second-largest exporter of oil, after Saudi Arabia.
The geopolitical fears backed gasoline to its peak intraday price since July. Gasoline futures have steadied recently, as high volumes of shipments have reduced inventories to low levels so far this year.
The per-gallon retail price of regular gasoline advanced 4.2% from a year ago to average $3.68 on Monday, as per figures from the US Energy Information Administration. Gasoline has not hit that price since March 2013.
“While gasoline prices are not yet at a point that materially slows demand, the upward trend is worthy of further monitoring,” said Simmons & Co. International’s Jeff Dietert.
Diesel added as much as 0.8%, as Bloomberg reports.
May delivery ultra low sulfur diesel jumped 1.64 cents or 0.6% to $2.9973 per gallon as of 10:48.
US oil futures have declined more than 2% this week. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at email@example.com