Brent up on Ukraine pressure

Brent crude14 April 2014, News Wires – Brent futures rose and hovered near $108 per barrel on Monday amid worsening geopolitical tensions over Ukraine that has raised the risk of a military confrontation between Ukraine and Russia.

Ukraine has given pro-Russian separatists a Monday morning deadline to disarm or face a “full-scale anti-terrorist operation” by its armed forces, while the United States and the European Union mull tougher sanctions against Russia if separatist action continues.

Brent crude rose $0.60 to $107.93 by Monday morning, after gaining 0.6% last week. It hit an intra-day high of $108.04. US oil climbed $0.53 to $104.27 after settling $0.34 up in the previous session.

“I don’t think they [Russia] will adhere to the deadline. Ukraine doesn’t have much bargaining power,” Phillip Futures investment analyst Tan Chee Tat told Reuters.

He added that the political crisis is unlikely to have a direct impact on global oil supplies, which is why Brent is likely to trade with a slight upside.

Russia has amassed 35,000 to 40,000 troops near the Ukrainian border, as well as the 25,000 troops it recently moved into Crimea, Britain’s UN ambassador Lyall Grant said.

The tensions overshadowed expectations of more Libyan crude coming into the market and potentially weighing on Brent prices thanks to weak demand outlook from China.

Libya’s western Zawiya oil port has resumed operations after protesters vacated the entrance to the facilities and the adjoining refinery will restart in about 24 hours, a spokesman for the state oil company said.

The National Oil Corp spokesman added there were continuing issues with protesters in the area but they hoped to resolve these in the next few hours.

Further gains in prices were also limited as investors await fresh data from the world’s second-biggest consumer China.

A Reuters poll showed growth slowed to 7.3% in the first quarter from 7.7% in the final three months of 2013.

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