|
 Russia declared Ukraine on the brink of civil war as Kiev began a
"special operation" against pro-Russian separatists in the eastern
town of Kramatorsk and retook a main airfield there.
Brent rose to a near six-week high on Monday after Western powers
agreed to expand sanctions against Russia over Ukraine.
But Brent's gains were capped and U.S. crude held in negative
territory as the gradual reopening of several Libyan oil ports that
had been blockaded by rebel groups since July added to global oil
supply.
An oil tanker was due to load on Tuesday from the recently reopened
Hariga port, the first exports after a deal to end months of
closures.
"The Libya news is bearish since the port opening is going to affect
the near-term supply ... and that outweighs the events in Ukraine,"
said Joseph Posillico, senior vice president of energy derivatives
at Jefferies Bache in New York.
Also pressuring U.S. crude oil prices was an expected rise in
domestic stockpiles. The American Petroleum Institute reported that
U.S. crude stocks rose by 7.6 million barrels last week, far more
than the 1.8 million barrel rise expected in a Reuters poll of
analysts. The U.S. Energy Information Administration will release
its official numbers on Wednesday at 10:30 a.m. EDT (1430 GMT).
U.S. crude futures fell 30 cents to settle at $103.75. The June
contract for Brent, which will become the front-month contract on
Wednesday, settled 29 cents higher at $109.36 a barrel. The Brent
contract for May, which will expire after settlement on Tuesday,
fell 33 cents to $108.74.
The May contract for Brent did not react to geopolitical risk issues
as it normally would because traders were balancing positions on the
last day before expiration, analysts said.
The market is now eyeing the release of key economic data from Asia
on Wednesday, including Chinese economic growth figures.
[to top of second column] |
RUSSIA RISK
In a tense phone call, U.S. President Barack Obama told Russian
President Vladimir Putin on Monday that Moscow would face further
costs for its actions in Ukraine and should use its influence to get
separatists in the country to stand down.
The White House said Ukraine's actions against pro-Russian
militiamen are called for because of the threat to law and order in
the country, though the United States is not considering providing
"lethal aid" to Ukraine, White House spokesman Jay Carney said.
The European Union agreed on Monday to expand a list of people to
target with sanctions for their suspected role in violating
Ukraine's territorial integrity. The EU could also hold an emergency
summit next week to adopt further measures. The United States is
considering new sanctions.
The Ukraine crisis, and in particular the annexation of Crimea by
Russia last month, has led to the most strained relations between
Moscow and the West since the Cold War and has supported oil, even
with expectations of more supplies and rising inventories.
But oil price gains have been limited so far, as oil flows from
Russia have not been affected, according to Jason Bordoff, director
of the Center on Global Energy Policy at Columbia University.
"In the near term, the market thinks that the EU will not move to a
higher level of sanctions that would have potential to upset oil
flows," he said.
(Additional reporting by Edward McAllister in Los Angeles, Peg
Mackey in London and Keith Wallis in Singapore; editing by William
Hardy, Marguerita Choy, Eric Walsh and James Dalgleish)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
