Brent retreats on Ukraine statement

Crude oil prices 118 April 2014, News Wires – Brent crude oil fell on Thursday, stalling below $100 a barrel after the United States, Russia, Ukraine and the European Union jointly called for an end to the violence in Ukraine, taking some risk premium out of the market, while US oil rose on positive economic data, reports said.

A statement from the four parties meeting in Geneva sought an immediate halt to violence in Ukraine, where Western powers believe Russia is fomenting a pro-Russian separatist movement, Reuters reported.

Brent crude for June delivery, which has received support in recent days as violence in Ukraine escalated, settled down $.07 at $109.53 a barrel, after earlier hitting a high of $110.19 ahead of the joint statement.

While the United States and European Union have stopped short of imposing sanctions on Russia’s oil and gas exports, tensions between them and the world’s second-largest crude exporter have put energy markets on edge.

“The rhetoric about the Ukraine has been ratcheted down and that fear play in oil markets is coming down with it,” Phil Flynn, analyst at Price Futures Group in Chicago, told the news wire.

“Instead, today we are talking about economic data.”

US prices found support from strong US employment data, which showed new applications for unemployment benefits close to a 6-1/2-year low, the latest sign the economy of the world’s largest oil consumer is gaining momentum.

US oil for delivery in May settled up $0.54 cents at $104.30 a barrel, after earlier hitting a high of $104.78 a barrel. The contract had touched a six-week high of $104.99 in the previous session, though a report showing a large build in stockpiles weighed on sentiment on Wednesday.

With Russian troops massed on the border with Ukraine and three separatists killed overnight in eastern Ukraine, the prospects of defusing the crisis at the Geneva talks had appeared slim, which boosted oil prices.

Russian President Vladimir Putin accused Ukraine’s leaders on Thursday of committing a “grave crime” by using the army to try to quell unrest in the east of the country and did not rule out sending in Russian troops.

But addressing Russians in his annual televised phone-in, Putin said he hoped he would not need to take such a step and that diplomacy could succeed in resolving the standoff.

Also pressuring crude was a stronger dollar against the yen and the euro, as traders bought dollars after the joint statement on Ukraine.

A softer dollar had earlier supported gains in dollar-priced commodities after US Federal Reserve Chair Janet Yellen stressed the need for accommodative monetary policy, citing persistently low inflation and economic slack.


– Upstream

About the Author