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Oil Prices Surge More than 2% as Putin Mobilizes More Troops

Vessels carrying supplies for an offshore oil platform operated by Exxon Mobil are seen at the Guyana Shore Base Inc wharf on the Demerara River, south of Georgetown, Guyana January 23, 2020. (Reuters)
Vessels carrying supplies for an offshore oil platform operated by Exxon Mobil are seen at the Guyana Shore Base Inc wharf on the Demerara River, south of Georgetown, Guyana January 23, 2020. (Reuters)
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Oil Prices Surge More than 2% as Putin Mobilizes More Troops

Vessels carrying supplies for an offshore oil platform operated by Exxon Mobil are seen at the Guyana Shore Base Inc wharf on the Demerara River, south of Georgetown, Guyana January 23, 2020. (Reuters)
Vessels carrying supplies for an offshore oil platform operated by Exxon Mobil are seen at the Guyana Shore Base Inc wharf on the Demerara River, south of Georgetown, Guyana January 23, 2020. (Reuters)

Oil jumped more than 2% on Wednesday after Russian President Vladimir Putin announced a partial military mobilization, escalating the war in Ukraine and raising concerns of tighter oil and gas supply.

Brent crude futures rose $2.28, or 2.5%, to $92.90 a barrel by 0707 GMT after falling $1.38 the previous day.

US West Texas Intermediate crude was at $86.16 a barrel, up $2.22, or 2.6%.

Putin said he had signed a decree on partial mobilization beginning on Wednesday, saying he was defending Russian territories and that the West wanted to destroy the country.

The escalation will lead to increased uncertainty over Russian energy supplies, said Warren Patterson, head of commodities research at ING.

"The move could possibly lead to calls for more aggressive action against Russia in terms of sanctions from the west," he said.

Oil soared and touched a multi-year high in March after the Ukraine war broke out.

European Union sanctions banning seaborne imports of Russian crude will come into force on Dec. 5.

"It seems like a knee-jerk reaction to a sliver of news and would be liable to further recalibration in the coming hours," said Vandana Hari, founder of Vanda Insights in Singapore.

Meanwhile, the United States said that it did not expect a breakthrough on reviving the 2015 Iran nuclear deal at this week's UN General Assembly, reducing the prospects of a return of Iranian barrels to the international market.

The OPEC+ producer grouping - the Organization of the Petroleum Exporting Countries and associates including Russia - is now falling a record 3.58 million barrels per day short of its production targets, or about 3.5% of global demand. The shortfall highlights the underlying tightness of supply in the market.

Investors this week have been bracing for another aggressive interest rate hike from the US Federal Reserve that they fear could lead to recession and plunging fuel demand.

The Fed is widely expected to hike rates by 75 basis points for the third time in a row later on Wednesday in its drive to rein in inflation.

Meanwhile, US crude and fuel stocks rose by about 1 million barrels for the week ended Sept. 16, according to market sources citing American Petroleum Institute figures on Tuesday.

US crude oil inventories were estimated to have risen last week by around 2.2 million barrels in the week to Sept. 16, according to an extended Reuters poll.

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Egypt’s Net Foreign Assets Rise in February

Hotels, banks and offices on the Nile River in Cairo (Reuters)
Hotels, banks and offices on the Nile River in Cairo (Reuters)
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Egypt’s Net Foreign Assets Rise in February

Hotels, banks and offices on the Nile River in Cairo (Reuters)
Hotels, banks and offices on the Nile River in Cairo (Reuters)

Egypt’s net foreign assets (NFAs) increased by $1.48 billion in February, marking the second monthly rise this year following consecutive declines in the final three months of 2024, according to data released by the Central Bank of Egypt (CBE).

Based on official exchange rates provided by the CBE, calculations by Reuters showed that net foreign assets rose to the equivalent of $10.18 billion at the end of February, up from $8.70 billion in January.
A banking source attributed the increase to growing foreign investor purchases of Egyptian treasury bills. January also saw an uptick in foreign assets after the government issued $2 billion in international bonds—the country’s first dollar-denominated bond sale in four years.

Further growth in foreign assets is expected in March after the International Monetary Fund approved a $1.2 billion disbursement to Egypt, following the fourth review of its $8 billion economic reform program signed in March 2024. Last month’s IMF approval also unlocked an additional $1.3 billion under the Fund’s Resilience and Sustainability Facility.

Following Egypt’s fourth currency devaluation in March 2024, the overall net foreign asset position of Egyptian banks swung into surplus by about $14.29 billion in May—the first surplus in nearly 28 months. This turnaround came after the deficit had ballooned to nearly $29 billion by the end of January, just before the central bank’s latest reform measures.

However, the net foreign position of commercial banks alone (excluding the central bank) turned negative again in August due to renewed demand pressures for US dollars, just three months after the broader recovery.

In February, both the central bank and commercial banks recorded an increase in foreign assets. While the CBE’s foreign liabilities also grew during the month, those of commercial banks declined.