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Business News/ Market / Stock-market-news/  Brent climbs above $108 on renewed Ukraine tensions
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Brent climbs above $108 on renewed Ukraine tensions

US June crude gained 11 cents to $100.10 a barrel after peaking at $101.18 in the prior session, also a 1-1/2-week top

Brent crude for June delivery was up 27 cents at $108.16 by 0645 GMT after touching a 1-1/2-week high of $109.02 on Friday. Photo: BloombergPremium
Brent crude for June delivery was up 27 cents at $108.16 by 0645 GMT after touching a 1-1/2-week high of $109.02 on Friday. Photo: Bloomberg

Singapore: Brent crude futures rose above $108 per barrel on Monday, supported by renewed tensions over Ukraine that heighten the risk of disruption to energy supplies.

Pro-Moscow rebels claimed a resounding victory in Sunday’s referendum in eastern Ukraine, with nearly 90% voting in favour of self-rule for the region.

“If we see there’s more escalation in Ukraine it will support US prices back up to $102 this week. If US is $2 more than the current price, Brent will be $2.50-$3 more," said Jonathan Barratt, chief executive of Sydney-based commodity research firm Barratt Bulletin.

Brent crude for June delivery was up 27 cents at $108.16 by 0645 GMT after touching a 1-1/2-week high of $109.02 on Friday.

US June crude gained 11 cents to $100.10 a barrel after peaking at $101.18 in the prior session, also a 1-1/2-week top.

Saudi Arabia is willing to supply oil if there are shortages due to the tensions over Ukraine, oil minister Ali Al-Naimi said in the South Korean capital on Monday, where he is attending a conference.

“We don’t expect a big surge or spike in oil prices from Ukraine," said Ken Hasegawa, commodity sales manager at Newedge Japan in Tokyo.

Brent and US crude prices are expected to be range-bound within $1 of Friday’s close, Hasegawa told Reuters.

The European Union, which called Sunday’s plebiscite illegal, could strengthen the sanctions it placed on Russia after Moscow annexed Ukraine’s Crimea region following a similar vote in March.

Foreign ministers from the 28-nation bloc are due to meet on Monday to decide whether to add about 15 people and several Crimean-based companies to its list of 48 Russians and Ukrainians already targetted with asset freezes and visa bans.

The key to the Ukraine crisis is whether the “conflict develops into civil war rather than drags in Russia and the European Union or Russia and the US," Barratt said.

There would be wider implications for European energy supplies if Russia became directly involved, Barratt added.

Investors are also keeping an eye on industrial production and retail sales data that China will release on Tuesday. “I expect industrial production to be softer," Barratt said.

“The premier (Li Keqiang) came out at the weekend that China had to get used to 7.5% growth as the new norm. It’s about the third time he’s said this," Barratt said.

Negotiators from Iran and the International Atomic Energy Agency will meet in the Austrian capital Vienna on Monday, a day before talks resume between Tehran and six western nations over Iran’s nuclear programme.

The two sets of talks are separate but closely linked as both focus on fears that Iran may be covertly seeking the capability to develop nuclear weapons.

Any sign of progress towards a final resolution to the West’s dispute with Tehran would pressure oil prices in anticipation of a ramp-up in Iranian oil exports. REUTERS

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Published: 12 May 2014, 12:47 PM IST
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