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Oil market rally on resurgent Ukraine tensions

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AFP London
Last Updated : Apr 08 2014 | 11:13 PM IST
Global oil prices advanced today on renewed Ukraine tensions after pro-Russian protesters seized government buildings in the eastern city of Donetsk.
New York's West Texas Intermediate (WTI) for delivery in May won 82 cents to USD 101.26 per barrel.
Brent North Sea crude for May gained 50 cents to USD 106.32 a barrel in late afternoon trade in London.
"Crude futures are higher on both sides of the Atlantic, with volume in WTI higher than normal and Brent volume a little light so far," said Addison Armstrong, senior director of market research for Tradition Energy.
"Oil is firming in reaction to heightened tensions in Ukraine, where Russia has warned of civil war if Kiev asserts military control in the eastern part of the country."
NATO's chief today warned Russia against further intervention in Ukraine, urging Moscow to "step back" after pro-Kremlin militants seized government buildings in several cities in the east.

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Pro-Russia activists have seized state buildings in the eastern cities of Kharkiv, Lugansk and Donetsk, where they have vowed to vote on joining Russia in an eerie echo of last month's situation in Crimea, a Black Sea peninsula that has since been annexed by Moscow.
"Unsettling news continues to come out of east Ukraine, where pro-Russian separatists are becoming increasingly forthright in their demands for a split from Ukraine and an accession to Russia," said Commerzbank analyst Carsten Fritsch.
"Ukraine accuses Russia of fuelling these tensions. Any further escalation of the situation would intensify tensions between Russia and the West and could lead to tighter sanctions being imposed on Russia.
"So far, the market appears to believe this to be unlikely, though that means the (oil) price would react all the more strongly if sanctions actually were imposed on the Russian oil and gas sector."
With Ukraine being a key conduit for Russian gas to Europe traders fear that any disruption to supplies will send oil and gas prices skyrocketing.
Russian deliveries account for 34 per cent of the natural gas supplies to the European Union, according to the Soufan Group, a US-based intelligence firm.

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First Published: Apr 08 2014 | 11:13 PM IST

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