Brent rises on Ukraine tension

rubbermarketnews_RMN_brent_crude_oil_05024 April 2014, News Wires – Brent futures rose on Thursday as Russia vowed to respond if its interests in Ukraine came under attack, stoking fears of an escalation in tensions that have pushed the oil benchmark up 5% this month to hover above $109 a barrel.

Russia accused the US of being behind the political upheaval in Ukraine, now in its fourth month, which has dragged Moscow’s relations with the West to their lowest since the Cold War.

But price gains were capped as oil stockpiles in the United States rose to a record.

Brent crude had climbed 19 cents to $109.30 a barrel early on Thursday, after settling 16 cents lower. The contract has ended above $109 for the fourth straight day and has held near a six-week high. US oil increased 22 cents to $101.66, after settling 31 cents lower.

“The immediate demand-supply dynamic is negative, but Ukraine is the wildcard that is stopping the market from declining further,” said Ric Spooner, chief analyst at CMC Markets.

“For the near term, I see markets largely neutral, trading in a range with a downward bias.”

NATO says Russia has built up a force of about 40,000 troops in its border with Ukraine. Moscow says some are stationed there permanently, while others have been deployed as a precaution to protect Russia from the instability in Ukraine.

A further escalation could lead to damaging economic sanctions, and raises the risk of a disruption to the Russian gas supplies on which Europe depends. The region is not key to global oil supplies, but investors are worried a sudden turn in events for the worse could rattle markets.



– Upstream

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