Oil Prices Rise Due to Russia's Response Against Ukraine's Strike

Oil prices are on the rise. Recent geopolitical tensions between Russia and Ukraine are a big driver here.

Crude oil prices have jumped by almost 2%. Brent crude futures went up by $1.42, closing at $74.23 per barrel, while West Texas Intermediate (WTI) increased by $1.35 to $70.10 per barrel.

This is largely due to the fear of global oil supply disruptions if the conflict worsens. Ukraine has reported a new missile launch by Russia, potentially with nuclear capabilities, adding to these tensions.

Oil markets are highly sensitive to geopolitical events. Russia is the second-largest crude oil exporter, so any conflict involving them causes market jitters. If Russia's energy facilities were to be targeted, or if they retaliated, it could severely impact oil supplies.

Interestingly, while tensions drove prices up, an increase in U.S. crude oil inventories would normally lower prices. U.S. stocks rose by 545,000 barrels recently, which should cool prices, but political tensions overshadow these price-tempering factors.

Other global economic factors are also at play. China is working to boost trade and secure energy imports amid worries about trade restrictions. OPEC+ might hold back on boosting production because of sluggish demand.

There are even talks about possible interest rate cuts, which could influence oil demand as well.