Markets took confidence from comments by Russian President Vladimir
Putin that he would not seize other regions of Ukraine outside
Crimea, though a Ukrainian serviceman was killed after his base came
under attack, showing the crisis was still volatile.
U.S. equities showed strong gains with all 10 primary S&P 500
U.S. crude oil inventories rose 5.9 million barrels in the week to
March 14, much more than analysts' expectations for an increase of
2.6 million barrels, data from the industry group the American
Petroleum Institute showed.
Traders awaited official data from the U.S. Energy Information
Administration to be released Wednesday at 10:30 a.m. EDT (1430
"We first rallied because stock market was going up, but reports of
violence put the risk premium back in as well," said Phil Flynn,
senior energy analyst at Price Futures Group in Chicago.
U.S. crude settled $1.62 higher at $99.70 per barrel. Prices had
mostly fallen in recent weeks since touching a five-month high of
$105.22 on March 3 when worries of war in Ukraine peaked, and
settled 81 cents lower on Monday.
Brent crude oil settled 55 cents higher at $106.79 per barrel, after
hitting a six-week low on Monday.
Brent rose gradually after the death of the Ukrainian serviceman was
reported, supported also by lower supply from the Middle East and
The gains in U.S. crude lifted refined product prices. New York
ultra-low sulfur diesel, commonly known as heating oil, rose nearly
2.5 cents to $2.9155. New York gasoline RBOB rose more than 2 cents
to settle at $2.9028.
Defying protests by Ukraine and Western sanctions, Putin signed a
treaty making Crimea part of Russia but told a joint session of
parliament in the Kremlin he did not plan to seize any other regions
[to top of second column]
The White House condemned Putin's decision to annex Crimea,
escalating tensions in a confrontation that traders worry could
affect Russian energy exports to Europe.
Europe bought 4.33 million barrels per day (bpd) of Russian oil last
year, or 44 percent of OECD Europe's net oil imports, according to
the International Energy Agency.
U.S. and European sanctions imposed on Monday targeted Russian and
Crimea individuals, but not broad trade.
Government data showed mostly sluggish economic growth in the first
quarter in the world's largest oil consumer. U.S. inflation was
muted in February and housing starts fell for a third straight
month, though the Consumer Price Index nudged up 0.1 percent for the
second month in a row.
In Libya, oil exports have been between 100,000 and 120,000 bpd in
the last two weeks, the country's acting oil minister said.
The country's exports have been well below its capacity of around
1.25 million bpd since July 2013 when militias and protesters began
blocking its major oil export terminals and oilfields.
(Additional reporting by Christopher Johnson in London and Keith
Wallis in Singapore; editing David Evans, Keiron Henderson, Andrew
Hay and Marguerita Choy)
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