By Barani Krishnan
Investing.com -- The counter-trade is present in almost every trade, though its significance always depends on the strength of the directional trade.
In Tuesday’s crude trade, prices rose but not in a straight line as some traders kept open the option that Russian oil and other energy exports may not get strangulated all together by Western sanctions against Moscow for its “backdoor invasion” of eastern Ukraine.
President Joe Biden announced that the United States has imposed full blocking sanctions on two Russian banks, on Russian elites and family members and on Russia's sovereign debt.
New York-traded West Texas Intermediate, the benchmark for U.S. crude, settled up $1.28, or 1.4%, at $92.35. The session high was $94.42.
London-traded Brent, the global benchmark for oil, settled up $1.45, or 1.5%, at $96.84 a barrel by 2:30 PM ET (19:30 GMT). The intraday peak came just shy of the $100 peak, at $99.50,
Many had expected crude prices to breach $100 a barrel on Tuesday upon news of Russia’s invasion into Ukraine. Russia’s parliament approved troops for “peacekeeping operations” in the two breakaway regions in eastern Ukraine that Moscow formally endorsed earlier in the day. Columns of military vehicles including tanks were seen early Tuesday on the outskirts of Donetsk, one of the occupied territories.
Biden called the latest Kremlin’s provocations on Ukraine an invasion — regardless what the Russian parliament called it.
"If Russia goes further with this invasion, we stand prepared to go further with sanctions," he said, adding that he was, however, keeping diplomatic options open.
Germany on Tuesday halted the Nord Stream 2 Baltic Sea gas pipeline project, designed to double the flow of Russian gas direct to Germany, after Russia formally recognized the two breakaway regions in eastern Ukraine.
U.S. natural gas futures were up 2% at $4.46 per thermal unit on speculation that more gas supplies will be sourced from America’s gas supply to cover Europe’s shortfall in heating and power needs.
Oil traders are looking out to see what impact new sanctions could have on Russia’s crude exports and how that will factor into a world where supply was already heavily strained by shortages created by deliberate OPEC+ production cuts.