Oil Prices Soar as Onslaught on Russian Convoy Boosts Ukraine Anxiety

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 Oil Prices Soar as Onslaught on Russian Convoy Boosts Ukraine Anxiety

The prices of Brent and West Intermediate oil jumped after Ukraine said its forces fired at and partially destroyed a convoy crossing into its territory from Russia.

“Ukrainian troops attacked the trucks that had reached the country overnight via a rebel-controlled section of the border,” said Andriy Lysenko, the country’s military spokesman. Brent hit its lowest point since June 2013 on Thursday while WTI traded at a six month low against the background of weaker demand and surplus global inventories.

“When there’s the prospect of ground war in Europe you don’t want to be short oil. Prices have already fallen a lot and the market was ready for a rebound,” Bill O’Grady of St. Louis-basedConfluence Investment Management told Bloomberg.

October-delivery Brent added $1.27 or 1.2%, to $103.34 per barrel on the ICE Futures Europe exchange in London at 1:39 pm, New York time.The September future traded at $102.01 by expiry yesterday, the lowest for a front-month contract since June 26, 2016.

WTI for September delivery ascended $1.41 or 1.5% to $96.99 per barrel on the New York Mercantile Exchange. Futures are heading for a 0.7% weekly decline. The contract sank to $95.58 yesterday, the lowest price since Jan.21.

Ukraine has for months accused Russia of backing separatist insurgents in its eastern regions, by offering them weapons. Russia has dismissed allegations linking it to the Ukrainian conflict. The Russian Foreign Ministry voiced concerns about possible attempts to block a humanitarian convoy and reiterated calls for a halt to hostilities to allow flow of aid.

According to MarketWatch, analysts said that euro-zone economic growth figures that were below expectations, conciliatory attitude from Russian President Vladimir Putin, news that Iraqi Prime Minister Nouri al-Maliki would call it a day and the resumption of operation of Libya’s largest port have all contributed to the downward trend registered by oil recently.

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