Oil prices jumped on Thursday as supply worries returned to the market.
The West Texas Intermediate (WTI) for April delivery added 7.94 U.S. dollars, or 8.4 percent, to settle at 102.98 dollars a barrel on the New York Mercantile Exchange. Brent crude for May delivery increased 8.62 dollars, or 8.8 percent, to close at 106.64 dollars a barrel on the London ICE Futures Exchange.
"The rise in oil prices today could be related to the IEA's latest forecasts for the oil market, which the IEA now expects to be noticeably tighter than it did before. This is due to a sharp fall in oil production in Russia," Carsten Fritsch, energy analyst at Commerzbank Research, said Thursday in a note.
In its monthly report released on Wednesday, the International Energy Agency (IEA) said "the prospect of large-scale disruptions to Russian oil production is threatening to create a global oil supply shock."
It estimated that three million barrels per day of Russian oil output could be shut in from April "as sanctions take hold and buyers shun exports."
The IEA also revised its oil demand forecast from the second quarter noticeably down to take account of lower global economic growth caused by the high commodities prices and sanctions against Russia.