NEW YORK - Oil prices shot up more than $5 a barrel Thursday, rising to the highest level in over two weeks as escalating tensions with Russia stoked fears of supply disruptions to the West.
Crude’s rally mimicked the wild price swings seen last month and at least temporarily halted oil’s slide back toward $100 a barrel. A weaker U.S. dollar and worries about tightening output from OPEC countries are also supporting prices.
After days of brushing off geopolitical flare-ups and a tropical storm, oil spiked above $122 a barrel as traders became rattled over increasingly hostile Russian rhetoric toward a U.S.-Poland deal to install a missile defense system in Eastern Europe — a move Moscow views as a threat.
The continued presence of Russian troops in Georgia — a key conduit for Western-bound oil shipments — injected even more bullish sentiment into a market that had appeared to be losing momentum on the idea that high energy prices were curbing demand.
Oil watchers said the market’s sudden reaction to the standoff reflects a growing acknowledgment of Russia’s bearlike influence over world energy supplies.