West Texas Intermediate crude hit its first weekly gain in a month over the shooting down of a Malaysia Airlines passenger plane in Ukraine and Israel ground troops marched into the Gaza strip.
WTI has soared 3% since July 15, when it hit a mark below $100 for the first time in two months. The Boeing Co. 777 crashed in the main conflict of Ukraine’s civil unrest, threatening to deteriorate the worst post-cold war crisis between the West and Russia. Israel’s presence of ground troops and tanks into Gaza is the first substantial ground offensive in the area since 2009.
“The geopolitical threat was discounted too quickly and has rapidly been priced back in. The events in eastern Ukraine and in the Middle East are a reminder of the fragility of the world’s biggest oil-exporting regions,”John Kilduff of Again Capital LLC in New York is quoted by Bloomberg as saying.
On the New York Mercantile Exchange, August-delivery WTI lost 6 cents to trade at $103.13 per barrel. The volume of all futures that changed hands surpassed the average for the past 100 days by 47%. Futures jumped 2.3% the week ended Friday 18 and are up 4.8% this year.
The per-barrel price of September-settlement Brent declined 65 cents or 0.6% to trade at $107.24 on the ICE Futures Europe exchange in London. The September contract slipped 2 cents for the week.
The US and the European Union imposed additional sanctions on Russian lenders, energy and defense companies in the latest punitive measure against the company over Ukraine. OAO Rosneft, which is the biggest oil firm in Russia and OAO Novatek, a natural gas producer, are some of the firm targeted in the measures.
But analyst Gene McGillian of Tradition Energy in Stamford, Connecticut told Reuters that stakeholders haven’t yet jumped into conclusions over the Malaysian plane crush.