A commodity analyst says oil markets are spooked by the Russian invasion of Ukraine, which resulted in a sudden spike in oil prices yesterday.

Gas watcher Dan McTeague predicted yesterday that gas would be going up by eight or nine cents a litre this weekend just about everywhere in the country and many are out today gassing up.

While the markets eventually settled again before the end of trading, Brent crude reached a peak of about $106 dollars US per barrel.

The author of the Commodity Context Newsletter, Rory Johnston, says oil markets were already extremely tight even before Russia’s move.

He says Russia produces about 10 per cent of the world’s crude oil and the markets reacted to the possibility of losing any of that supply.

The market was already undersupplied by about 2-million barrels per day last year alone according to Johnston, and losing Russia’s 10 million barrels a day of production will add to the existing undersupply.

That, according to Johnston, could result in all-time high prices “even beating the price we say back in 2008,” jumping to $120 or $130 or more.

He admits that’s a tail-risk probability and he is hopeful something will happen to avoid a worst-case scenario, but what that might be is still unknown.

Earlier Story

It was a roller coaster ride on the oil markets yesterday as the world reacted to the Russian invasion of Ukraine.

After soaring to $105 dollars a barrel earlier in the day, Brent crude eventually settled down to close at $96.84 a barrel. It’s currently trading at $98 pbl.

Still, the uncertainty created by the attack on Ukraine is expected to result in higher prices at the pumps in the days ahead.

Yesterday, president of Canadians for Affordable Energy, Dan McTeague tweeted out that gas prices could rise an astounding 8 to 9 cents a litre across most of the country this weekend.