Oil prices rise sharply after Russia’s attack on Ukraine

Oil prices rose as Russia and Ukraine exchanged missile strikes, overshadowing the impact of a larger-than-expected increase in U.S. crude inventories.

Brent crude futures rose 96 cents, or 1.3%, to $73.77 a barrel at 1017 GMT. U.S. West Texas Intermediate crude futures gained 99 cents, or 1.4%, to $69.74 a barrel.

On Wednesday, Ukraine fired British cruise missiles at Russia, the latest Western weapon it has been allowed to use, a day after firing U.S.-made missiles.

Kyiv’s air force reported that Russia responded Thursday morning by launching an intercontinental ballistic missile at Ukraine, marking the first time Moscow has used such a powerful long-range missile during the war.

Russia has stated that the use of Western weapons to attack its territory far from the border would represent a significant escalation in the conflict. Kyiv argues that it must be able to strike Russian bases used to support Moscow's invasion, which has now reached its 1,000th day.

“For oil, the risk is if Ukraine targets Russian energy infrastructure, while the other risk is uncertainty about how Russia will respond to these attacks,” ING analysts noted in a report.

Meanwhile, OPEC+ may again delay increasing production when it meets on December 1 due to weak global oil demand, three OPEC+ sources familiar with the discussions said.

The production group, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, pumps about half of the world's oil. It had initially planned to gradually reverse production cuts starting at the end of 2024 and into 2025.

However, the International Energy Agency (IEA) has stated that even if OPEC+ maintains its cuts, oil supply will continue to outstrip demand in 2025.

U.S. crude inventories rose by 545,000 barrels to 430.3 million barrels in the week ending November 15, exceeding analysts' expectations.

Gasoline inventories increased more than expected last week, while distillate stocks posted a larger-than-anticipated decline, according to data from the Energy Information Administration (EIA).