Oil prices seesaw near $104 amid Ukraine tensions

PABLO GORONDI, Associated Press
The price of crude oil was volatile around $104 a barrel on Monday amid escalating tensions in Ukraine.
Copyright 2014, The Associated Press

The price of crude oil was volatile around $104 a barrel on Monday amid escalating tensions in Ukraine.

By early afternoon in Europe, benchmark U.S. crude for May delivery was down 11 cents to $103.63 a barrel in electronic trading on the New York Mercantile Exchange. Earlier Monday, the contract climbed as high as $104.55.

Brent crude, a benchmark for international varieties of oil, was up 39 cents to $107.72 a barrel on the ICE Futures exchange in London.

Ukraine's government announced Sunday it was sending in troops to try to quash a pro-Russian insurgency in eastern Ukraine despite warnings from the Kremlin. Markets have been rattled by concern Western sanctions against Moscow might disrupt Russian exports of oil and gas.

"This standoff has been regarded as potentially disruptive to Russian gas supplies to Europe, however at this point we see a cutoff to the EU as unrealistic," said a report from analysts at JBC Energy in Vienna.

Disparate developments in Libya were also affecting oil prices. On Sunday, Abdullah al-Thani became the second Libyan prime minister to resign within two months, underlining the nation's instability after the fall of dictator Muammar Gadhafi in 2011.

On the other hand, signs that Libyan oil production could rise closer to normal levels was contributing marginally to lower oil prices, though government instability could delay the handing back of refineries currently controlled by militias.

"The imminent resumption of oil shipments from two ports in eastern Libya is likely to have virtually no impact, since they have joint export capacity of only 200,000 barrels per day," said analysts at Commerzbank in Frankfurt. "The two largest ports in the country — which have total daily capacity of 500,000 barrels per day — remain occupied by rebels and closed."

 


Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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