Brent crude slid against the backdrop of speculation that the election of a new president in Ukraine would help ease prolonged periods of tension with Russia, the biggest energy supplier in the world. West Texas Intermediate went down in New York.
Futures descended as low as 0.7% in London. The elections gave billionaire President Petro Poroshenko the mandate to deal with separatists tensions in the country, which is a supply route for shipments of Russian oil and natural gas to Europe. China, the world’s second-largest consumer of oil, said it was strategizing to stem the pace of energy use.
“There’s been quite a political vacuum in Ukraine, and that should begin to get resolved. News about Ukraine has been helping to bring down prices a bit,” Ole Hansen of Copenhagen-based Saxo Bank told Bloomberg by phone.
He said Poroshenko is someone who’s capable of bringing the Russians to the negotiating table with a view to resolving outstanding disputes.
The per-barrel price of July-settlement Brent plunged as much as 79 cents to $109.75 on the ICE Futures Europe exchange in London. The contract was at $109.99 as of 1:47 pm in London. It added 18 cents on May 23 to hit $110.54. The volume of futures traded at the exchange was 74% lower than the average for 100 days.
WTI meant for delivery in July plummeted as much as 43 cents or 0.4%. The contract stood at $104 per barrel in digital trading on the New York Mercantile Exchange. WTI, which is the US benchmark crude, exchanged at a discount of $5.92 to Brent.
According to Reuters, Russia said it was willing to dialogue with Poroshenko, although it warned Kiev not to intensify its crackdown on separatists in the east. Ukraine went into elections against the background of separatist mayhem that started when Russia annexed Crimea from Ukraine in March.
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 email@example.com