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Oil prices gave back most of their significant overnight gains in a chaotic session that saw prices briefly plunge into negative territory after climbing over $130 earlier in the day.
Prices spiked when trading resumed on Sunday evening, as the market reacted to supply interruptions caused by Russia’s escalating invasion of Ukraine, as well as the threat of a ban on Russian oil and natural gas.
Prices then began to fall. Rebecca Babin, the senior energy trader at CIBC Private Wealth, attributes the drop in prices to German statements indicating that the country is unwilling to restrict imports of Russian energy from the government.
According to the analyst, crude prices have fallen after remarks from Germany that they have no intentions to limit Russian energy imports and signals that the United States is looking into other barrel sources like Venezuela and Saudi Arabia. “I think the most significant thing to take away from this morning’s trading activity is that the situation is incredibly fluid,” she said.
The West Texas Intermediate crude futures contract, the U.S. benchmark for oil, reached a high of $130.50 on Sunday evening, the highest level since July 2008, before reversing course.
In the end, WTI futures finished 3.2 percent higher at $119.40, the highest settlement since September 2008.
According to the International Energy Agency, Brent crude oil, the worldwide standard, finished the day up 4.3 percent at $123.21 per barrel. Brent reached a high of $139.13 at one point overnight, which was also the highest price since July of last year.
Again Capital’s John Kilduff said that “oil is increasing as a result of the risk of a complete ban on Russian oil and goods.” “Gasoline costs, which are already very high, will continue to rise at an alarming rate. Prices in several places will be approaching $5 within a short period.”