WTI rallies roughly $2.0 to back above $94.00 amid confusion over alleged Russian troop withdrawal

Crude oil prices have seen substantial upside in recent trade as market participants fret amid confusion over whether Russia is actually withdrawing some troops from its border with Ukraine as is said it would on Tuesday. Western leaders, government and intelligence officials have been loudly warning, including remarks most recently from US Secretary of State Anthony Blinken in an interview with MSNBC, that there is not yet any evidence of Russian withdrawal. On the contrary, they said, Russia continues to add to its attack capabilities, they said.

Associated fears as investors continue to weigh the prospect of a Russia/Ukraine military conflict and associated disruptions to global oil supply have propelled front-month WTI futures roughly $2.0 higher on Wednesday from session lows under $92.00 to above $94.00. That means prices are now back to within $2.0 of last Friday’s seven-year highs near the $96.00 level and have now rebounded roughly $3.50 from Monday’s mid-$90.00 lows. Weekly Private US crude oil inventory figures out on Tuesday showed that crude oil, gasoline and distillate stocks all drew last week, with the upcoming official US inventory report at 1530GMT expected to show the same and lending to the idea that oil markets remain tight.

OPEC’s secretary general Mohammed Barkindo on Wednesday said that current levels of oil supply are not enough, but warned that this was due to underinvestment from oil companies and cautioned that there would be no immediate cure for high prices. Many commodity strategists continue to believe that oil markets are headed back towards $100 per barrel or more, regardless of geopolitical developments in Eastern Europe, as smaller OPEC+ members continue to struggle to lift output in line with quota increases.