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Oil hits $118, highest level in 9yrs

Oil hits $118, highest level in 9 years

Oil shot to its highest level in more than nine years Thursday and wheat prices climbed above $11 a bushel for the first time since 2008, amid indications that Russian forces had seized the city of Kherson in southern Ukraine.

Brent crude rose as much as 4.7 per cent to $118.22 a barrel, the highest level since February 2013, putting the global benchmark about 50 per cent higher for the year. West Texas Intermediate, the US marker, jumped as much as 3.7 per cent to $114.70.

“The market’s ability to access crude from the region because of sanctions or a risk of outright supply losses look set to persist for a prolonged period, given the realities on the ground,” said Louise Dickson, senior oil market analyst at Rystad Energy.

Boycotts of Russian suppliers have also hit natural gas, with European prices on Wednesday settling more than 40 per cent higher at €173 a megawatt hour.

Wheat futures traded in Chicago also rose, gaining as much as 13 per cent to $11.32 a bushel, as the conflict has severely disrupted shipments from Ukraine and Russia. The two countries account for almost a third of global exports.

Russian forces continued to bombard cities in Ukraine on Thursday as media reports indicated troops had entered the city hall of Kherson, potentially marking the first provincial capital to fall during the invasion.

Equity markets in Asia rose after Jay Powell, US Federal Reserve chair, indicated the US central bank would raise interest rates this month. Japan’s benchmark Topix was 1.4 per cent higher while Hong Kong’s Hang Seng index climbed 0.3 per cent.