The iShares U.S. Oil & Gas Exploration & Production ETF (IEO) is up more than 1.0% this morning after the war in Ukraine had the U.S. crude oil hit $130 a barrel on Monday.
U.S. oil stocks are in the green today
The steep surge in West Texas Intermediate (WTI) crude futures was related to fears of severe supply disruptions as reports emerged that the U.S. and its allies were considering banning Russian oil and gas.
The last time WTI was seen at such inflated levels was amidst the global financial crisis of 2008. Brent crude, at one point on Monday, stood at $139 a barrel.
Oil stocks, including giants like Exxon and Chevron are in the green this morning.
Pro says oil prices could rise even further
The Russian oil embargo essentially means that the world will shun 4.3 million barrels oil per day, which Again Capital’s John Kilduff warns could boost prices further up. On CNBC’s “Squawk Box”, he said:
Oil prices could go well higher if we do in fact get a full embargo of the Russian oil, especially if China’s hand is forced. But if there’s some kind of a diplomatic climb down on this thing, these oil prices probably have upwards of $30 a barrel of air in them.
Kilduff doesn’t expect oil to remain this lofty for a “meaningful period of time”, but if it does, he added, it could mean a 2-point hit to the U.S. GDP.