Brent crude advanced as escalating tensions between Ukraine and Russia, the world's biggest energy exporter, offset the potential for increased Libyan supply. West Texas Intermediate traded between gains and losses.
Futures in London increased as much as 1 percent to the highest intraday level since March 28. Russia called for an emergency meeting of the United Nations Security Council after Ukrainian security forces clashed with pro-Russian gunmen in the eastern town of Slovyansk. The port of Zawiya in western Libya reopened and a tanker will load at Hariga in the east, industry officials in the holder of Africa's biggest oil reserves said yesterday.
"Geopolitical risks are still there and rising tensions in Ukraine or sanction talk will offer temporary support," Andrey Kryuchenkov, an analyst at VTB Capital in London, said by e-mail."The outlook is very comfortable with extra Libya supplies and relatively slack refinery demand."
Brent for May settlement rose 0.5 percent to $107.91 a barrel by 1:51 p.m. on the London-based ICE Futures Europe exchange. It earlier gained as much as $1.05 to $108.38 a barrel to the highest in two weeks.
WTI for May delivery was unchanged at $103.74 in electronic trading on the New York Mercantile Exchange. The U.S. benchmark grade was at a discount of $4.24 to Brent. It shrank to $3.27 on an intraday basis on April 11, the least since Sept. 20.
In Ukraine, camouflaged gunmen fired on government forces near Slovyansk, about 240 kilometers (150 miles) from the Russian frontier, Ukrainian Interior Minister Arsen Avakov said. "Henchmen" of the government in Kiev are organizing attacks with the backing of Western nations, Russia's Ambassador to the United Nations Vitaly Churkin said at an emergency session of the Security Council in New York.
"The major contributor to the firm tone we're seeing in the market is further concerns about Ukraine," said Michael McCarthy, a chief strategist at CMC Markets in Sydney who predicts investors may sell contracts if Brent climbs to $109.50 a barrel. "Tensions are ramping up again. There's still a bit of upside from a technical point of view before we hit significant resistance."
A halt of Russia's crude and natural gas supplies through Ukraine "could be hugely impactful," according to Ed Morse, the head of commodities research at Citigroup Inc. Any sanctions on Russia's energy industry would cause prices to "spike much higher," he said in a report today.
While there are signs of Libyan crude supplies resuming, there's still conflict in the North African country. Abdullah Theni, the prime minister, asked to resign after he and his family were threatened, Arabiya TV reported yesterday, citing people it didn't identify.
Libya's state-run National Oil Corp. lifted force majeure on the Hariga terminal on April 10. The facility is one of four ports seized last year by rebels seeking self-rule in the east of the country.
The nation's Zawiya oil terminal and refinery resumed operations on April 12, Mansour Abdalla, head of the plant's oil measurement unit, said by phone yesterday.
Brent may extend gains as it advances above the 30-day middle Bollinger Band, data compiled by Bloomberg show. Futures climbed to as high as the upper Band after a similar pattern in February. The upper Band is at about $109.40 a barrel today.
Hedge funds and other money managers boosted net-long positions on WTI by 10 percent to 331,056 futures and options in the week ended April 8, according to the U.S. Commodity Futures Trading Commission. Bets on rising prices were at the highest level for this time of year since at least 2006, according to data from the Washington-based regulator.
For Brent, net-long positions by hedge funds and money managers increased for the first week in five to 133,029 contracts, the most since March 18, according to weekly data from the ICE Futures Europe exchange.
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.