The cost of Brent crude oil and natural gas have surged sharply as markets eye the chance of crucial Russian supplies being cut off – either through tightening Western sanctions or by a defiant President Vladimir Putin.
As UK households already fret over wide-ranging hikes to bills, with a leap of almost £700 in the energy price cap due on 1 April, there have been warnings that Russia’s invasion of Ukraine would to add to them more substantially still.
That is because Russia is a major producer of oil, gas and other crucial commodities such as wheat – with spikes in prices feeding through to products and services in the economy as additional cost burdens are passed on.
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UK contracts for natural gas due in April were, at one stage, 37% up at 398p but still 50p below month-ahead prices seen in December.
Market experts said there was a different reason for a rise of more than 8% in Brent crude oil prices, passing $113 a barrel for the first time since the summer of 2014.
They cited a decision by a major group of oil-producing nations, which includes Russia, to resist calls from big consumers of oil, including the US, for a hike in production to ease prices and mitigate the impact of Russian disruption.
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The so-called OPEC+ group said it would stick to its plans for a small increase from April.
“Current oil market fundamentals and the consensus on its outlook pointed to a well-balanced market, and that current
volatility is not caused by changes in market fundamentals but by current geopolitical developments,” it said, failing to call out the Russian invasion of Ukraine by name.
Traders said there was a lack of demand for Russian oil amid concerns that sanctions…
Source : skynews
