Rising tension between Russia and Ukraine stirs oil markets

The barrel price of Brent crude, which is monitored globally, rose to 61.34 dollars in international markets, while West Texas Intermediate (WTI) crude was trading at 57.89 dollars at the same time. Brent crude, which climbed to 61.68 dollars on a daily basis yesterday and closed at the 61.23 level, started the day with a slight increase.

The rise in oil prices was driven by concerns that peace talks are in jeopardy after Russia accused Ukraine of attacking President Vladimir Putin's official residence with a drone. Additionally, the persistence of expectations regarding interest rate cuts by the US Federal Reserve (Fed) also exerted upward pressure on prices.

In a statement, Russian Foreign Minister Sergey Lavrov made serious accusations against Ukraine, saying, "Russia's approach to negotiations will be reconsidered, taking into account the Kiev regime's definitive transition to a policy of state terrorism." Lavrov also announced that there would be a response to the attempted attack. On the other hand, Ukrainian President Volodymyr Zelenskyy denied the allegations regarding the drone attack.

The increasing tension and uncertainty have escalated supply concerns along the Russia-Ukraine line, providing support for oil prices. In particular, Russia's message of retaliation and the uncertainties in negotiations have increased volatility in global commodity markets.

On the US Federal Reserve side, markets are focused on the minutes of the Fed's Federal Open Market Committee (FOMC) meeting. It is known that the Fed has lowered the policy rate to the 3.50-3.75 percent range with three interest rate cuts in 2025. Two more cuts are expected in the coming months of March and July. With a new name coming to office due to the expiration of Fed Chair Jerome Powell's term, uncertainties regarding the monetary policy to be followed also persist.

The strong expectation of interest rate cuts in the economic environment supports the upward movement in oil. However, the perception of political pressure on the Fed's independence creates a cautious stance in the markets, and it is stated that this situation limits potential large jumps in prices to some extent.

Analysts note that from a technical perspective, the 62.50 dollar level will be monitored as resistance and 52.50 dollars as support for Brent crude.

News Source: 12punto