Crude Futures Advance as the US Imposes Additional Sanctions on Russia

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Crude Futures Advance as the US Imposes Additional Sanctions on Russia

June delivery crude oil added 24 cents or 0.2% to $100 per barrel on the New York Mercantile Exchange, getting on course for recovery from Friday’s 1.3% tumble.

Gunmen shot the mayor of Ukraine’s second-largest city of Kharkiv on Monday. Additionally, the Obama administration announced intentions to slap officials in the Russian government and firms with additional sanctions.

It’s not highly expected that the sanctions will touch on Russia’s gas industry, considering that Europe is heavily dependent on Russian oil and gas.

“Nonetheless, the Brent price is likely to find continued support from the uncertainty over the way the situation will play out in east Ukraine and from the possibility of delivery outages,” analysts from Frankfurt-based Commerzbank are quoted by Marketwatch as writing in a note.

On Monday, June Brent crude, the leading gauge in Europe, slid by 72 cents or 0.7% to $108.86 per barrel on the ICE Futures exchange.

Last week, oil futures suffered their biggest weekly loss since mid-March, under downward pressure from surplus crude inventories.

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Oil Stockpiles at Cushing, Okla, where the price of WTI is determined, dropped again to hit their lowest point since about five years in the week ended April 18. However, US Gulf Coast supplies reached a record peak.

According to Wall Street Journal, there is investor concern that sanctions on Russia could lead to less shipments from the country.

But news that Zuetina oil terminal of Libya would go back to operation soon helped keep oil markets in check with the prospects of injecting more oil into world markets, Commerzbank analysts said in a note. They added that it’s the abundance of oil in the global market that had kept Brent from soaring substantially above the $110 per barrel mark.

May delivery reformulated gasoline blendstock or RBOB advanced 0.24 cent or 0.1% to trade at $3.0775 per gallon.

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To contact the reporter of this story; Jonathan Millet at john@forexminute.com