Brent oil hit a two-week peak, expanding its premium to West Texas Intermediate, as the escalating chaos in eastern Ukraine increased tension between Russia and the West.
Russia, the biggest energy shipper in the world, denied US allegations that it made available anti-aircraft weapons to insurgents in neighboring Ukraine. President Barack Obama said he hopes the shooting down of the Malaysian Air plane in Ukraine to prompt nations within the EU to slap Russia with tougher economic measures.
WTI was lower 1% at the close on Friday on speculation that surging US fuel flow will reduce crude intake at refineries.
“We’re moving on the headlines about the crisis in Ukraine. “I’m skeptical that there will be any disruption of supply unless there was a major intensification of the crisis, which is unlikely,” Rob Haworth of US Bank Wealth Management in Seattle told Bloomberg.
September-delivery Brent soared $1.32 or 1.2% to close at $108.39 per barrel on the ICE Futures Europe exchange in London. It was the highest price the future has closed at since July 10. Prices gained 1% in the week.
WTI for settlement in September increased 2 cents to trade at $102.09 per barrel on the New York Mercantile Exchange. Contracts reached $101, an intraday low not registered since July 16. The US crude benchmark ended at a $6.30 discount to Brent, the widest gap since July 7.
A source from the Russian security apparatus was quoted as alleging that Ukraine forces fired up to 40 shells on to the Russian province of Rostov on Friday, not far from the border with eastern Ukraine, the battle ground for Kiev and pro-Moscow separatists, Reuters reported.
John Kilduff of New York-based Again Capital LLC said escalation of the conflict was fuelling shipment concerns, as both Russia and the West awaited to play “the energy card” as a means to sabotage each other’s economy.
To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at firstname.lastname@example.org