Brent crude ascended to $110 per barrel, the highest price since six weeks ago, against the backdrop of concerns that the Ukraine crisis was worsening. West Texas Intermediate surged before the release of weekly US stockpile data.
In London, futures added as much as 0.8%. Ukraine kicked off an onslaught against separatists in its eastern region, taking back an airport amid allegations that anti-government protesters were receiving support from Russian special forces.
According to a survey by Bloomberg before official government figures, US gasoline inventories are forecast to have declined by 1.75 million barrels, stretching seven weeks of losses.
“Oil is being driven more by the Ukraine situation. Does this situation mean more intense disagreements elsewhere, as in the cold war? In a tight market, such as WTI, anything can have an amplified effect,” said Guy Wolf top market analyst at London-based Marex Spectron Group.
June delivery Brent settled for the first time at above $110 since March 4, after rising 84 cents to $110.20 per barrel on the ICE Futures Europe exchange in London. The volume of all futures traded rose above the 100-day average by about 12%. Prices plunged 0.6% this year.
Ukraine’s government deployed troops and tanks to take back government installations and buildings seized by pro-Russian gunmen in the eastern part of the country. As ABC reports, NATO Secretary General Anders Fogh Rasmussen said the military organization would send troops to solidify its presence within close proximity to Ukraine, which is a neighbor to several members of the alliance.
A meeting which will be attended by representatives from Russia, Ukraine, US and EU will take place in Geneva on Thursday. The meeting aims at convincing Russia to pull out of Ukraine after it recently annexed Crimea.
Analysts anticipate that escalation of tension between Russia and Western powers could fuel a further hike in the oil market as crude prices ascend. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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