Oil prices rose as Ukraine-Russia tensions escalated

ANKARA

Oil prices rose on Wednesday following reports that Ukraine had hit Russia with long-range weapons, while concerns about a possible interest rate pause by the US Federal Reserve (Fed) and a strong US dollar limited gains.

The international oil benchmark Brent crude rose to $73.23 per barrel at 11:10 local time (08:10 GMT), up 0.12% from the previous session’s close of $73.14.

US benchmark West Texas Intermediate also rose 0.14% to $69.42 per barrel, from $69.32 at the close of the previous session.

Tensions rose between Russia and Ukraine after the international media reported that the Joe Biden administration had given Kiev permission to use long-range American weapons for a limited time.

The Russian Ministry of Defense announced on Tuesday that Ukraine attacked the Braynsk region of Russian territory at night with 6 American-made long-range tactical ATACMS missiles.

In the ministry statement, it was stated that the missiles were blocked by S-400 and “Pantsir” air defense missile systems.

Additionally, Russian President Vladimir Putin approved the doctrine that allows his country to respond with nuclear weapons if attacked with ballistic missiles.

The Russian Ministry of Defense also announced that the army captured the Novoselidovka settlement in the Donetsk region.

The Ministry reported that attacks were carried out against Ukraine’s military airport infrastructure and energy elements in 146 regions in the last 24 hours.

Meanwhile, uncertainty about the timeline for ending the Fed’s fight against inflation has put pressure on asset prices, increasing speculation that a rate cut next month could be off the table.

According to pricing in the money markets, the probability that the Fed will cut interest rates next month is 59%, and the probability of keeping the policy rate constant is 41%.

Additionally, the rise of the US dollar against other currencies is expected to reduce demand by making oil more expensive for those using foreign currencies. The US dollar index, which measures the value of the US dollar against other currencies, increased by 0.11 percent to 106.262.

The potential trade war between the United States and China, the world’s largest oil consumer, combined with persistent concerns about China’s economic activities, continues to affect commodity prices.

Ongoing concerns about economic activity in China support experts’ concerns about a slowdown in crude oil demand in the world’s largest oil importer.

After Donald Trump was re-elected as the US President, concerns about a possible trade war arose as the newly elected Trump was expected to impose tax cuts on companies and high customs duties on imported goods.

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