INSUBCONTINENT EXCLUSIVE:
Crude prices climb further to near $132, after Russian oil banCrude oil prices climbed about 3 per cent early on Wednesday to near $132 per
barrel, after rising around 4 per cent on Tuesday driven by the United States banning Russian oil and other energy imports over Moscow's
invasion of Ukraine.Global benchmark Brent was last trading at near $132 per barrel, up about 3 per cent on the day but still off a peak of
$139.13 touched on Monday.The oil shock by nature is an accruing one, not a one-off, and the potential for the market to hit $150 before
returning to $100 is easier for investors to digest," Stephen Innes, managing partner at SPI Asset Management, told Reuters."Putting in
force sanctions without first developing surrogate supply contingencies risks Brent crude (going) much higher," added Mr
Innes.On Tuesday, Brent crude rose to an intra-day high of $131.27 a barrel before settling at $127.98 a barrel, 3.9 per cent higher, while
US crude futures settled at $123.70 a barrel, a 3.6 per cent increase."Crude oil showed very high volatility on Tuesday after the US ban on
Russian oil and gas imports
Russia exports 7-8 million barrels per day of crude and fuel to the global markets, and banning Russian oil and gas could create supply
crunch in already tight supplied markets," said Rahul Kalantri, Vice President Commodities, Mehta Equities Ltd."We expect crude oil prices
to remain volatile in today's session ahead of the US EIA weekly inventory report," he added.Prices for Brent crude have surged more than 30
per cent since Russia invaded Ukraine on February 24, and the US and other countries imposed a raft of sanctions
Russian oil and gas exports were already being shunned before the ban as traders avoided running afoul of future sanctions.The disruption
could ripple through other energy markets, as Russian oil and products are used to refine into other goods and add more volatility in the
markets, stoking fears of rising inflation."We are at the beginning of that shockwave in energy markets," Roger Diwan, vice president of
financial services at S-P Global, told Reuters.After the sanctions announcement, US Energy Secretary Jennifer Granholm said that allies were
not under pressure to ban Russian oil.Solita Marcelli, chief investment officer in the Americas for UBS's wealth management arm, told
Reuters the increase in oil prices over the past week - the second-biggest jump in 30 years - is likely to stick, causing continued market
volatility."The Russia-Ukraine war has driven oil prices up faster than we previously expected, but we continue to see a tight supply-demand
balance for crude oil globally, even if the hostilities end and the geopolitical risk premium attached to crude declines," Ms Marcelli said.
