Oil rises to the highest since 2008 before turning lower

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Oil pipelines, pumping rigs, and electrical transmission lines dot the landscape along California’s “Petroleum Highway” (Highway 33) running along the northwestern side of the San Joaquin Valley.
George Rose | Getty Images

U.S. oil surged to the highest level since 2008 Thursday before reversing course and dipping into negative territory as the market weighs supply disruptions from Russia against a possible Iran nuclear deal.

West Texas Intermediate crude futures, the U.S. oil benchmark, traded as high as $116.57 per barrel, a price last seen on Sept. 22, 2008. International benchmark Brent crude hit $119.84, the highest level since May 2012.

Prices later stabilized. WTI dipped 1.7% to $108.75, while Brent was 1.4% lower at $111.41 per barrel. The action puts the contracts on track for their first negative day in four.

Russia’s invasion of Ukraine has been driving the narrative for oil, sending prices surging. A possible deal with Iran has been one factor cited that could bring some immediate relief for a very tight market.

“Unless there is a palpable thawing in tension in the form of concessions from either side and sanctions are lifted and/or Iran is allowed back to the market pronto so it can start selling its oil from storage until production is ramped up the risk premium is not expected to deflate markedly,” brokerage PVM said Thursday in a note to clients.

Despite Thursday’s decline both contracts are still solidly in the green for the week. WTI is up around 19%, while Brent has advanced 14%.

The oil market was already tight prior to Russia’s invasion of Ukraine, and with countries now shunning oil from key producer Russia, traders are worried that supply shortfalls will follow.