The European Union imposed sanctions against the Russian deputy
prime minister, two aides to President Vladimir Putin and nine
others on Friday, adding to the nearly two dozen prominent Russians
Washington sanctioned on Thursday, including Gennady Timchenko,
co-founder of oil trading firm Gunvor.
Within hours of Thursday's sanctions, Gunvor announced Timchenko had
sold his near 50 percent stake in the company to allow the firm,
which handles almost 3 percent of global oil supplies, to avoid
disruptions to its operations.
Brent rose 47 to settle at $106.92 per barrel, having earlier spiked
$1.32 to a session high of $107.77 per barrel. The European
benchmark still fell for a fourth week in a row.
A seasonal slump in demand has led to a near 5 percent price slide
since the beginning of March, when Brent briefly jumped to a
three-month high above $112 as Russia took control of Ukraine's
U.S. crude for May delivery, which became the front-month contract
on Friday, settled 56 cents higher at $99.46 per barrel, rising
modestly after falling for the week prior.
"This move is an example of headline risk, and so it will be fairly
short term," said Chris Nelder, an independent energy analyst and
author of Profit from the Peak oil investment book.
"Crude futures prices could move $2 plus or minus as the latest
developments in Crimea evolve. If we are concerned we will see
American troops going to war, we could see (U.S. oil) rise to $105
very easily. If not, we could fall back to $97," Nelder said.
The U.S. dollar was weaker against a basket of other currencies,
providing support for oil and commodities priced in the greenback.
Money managers cut their net long U.S. crude futures and options
positions last week, the U.S. Commodity Futures Trading Commission
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While Timchenko said he had sold his stake in Gunvor before being
sanctioned by the United States on Thursday, the fact that a major
energy trader has been dragged into a growing political stand-off
over Ukraine added to market concerns.
Gunvor, which had a turnover of $93 billion in 2012, grew rapidly by
trading large volumes of oil from Russian state companies such as
Rosneft at the end of last decade.
Since then, it ceded its leading positions and now focuses on
trading in Europe and Asia.
President Barack Obama threatened broad penalties against sectors of
Russia's economy if Moscow moves deeper into Ukraine.
Senior administration officials said many parts of the Russian
economy could be targeted, including energy, defence, mining and
financial services sectors.
European leaders on Thursday added 12 people to a list of those
subject to travel bans and asset freezes for their part in Russia's
seizure of Crimea and will begin preparations for trade and economic
measures if Russia expands its footprint in Ukraine.
Shares on the Moscow stock exchange — which have lost $70 billion of
their value this month — fell sharply in response to the sanctions.
(Additional reporting by David Sheppard in London and Jacob Gronholt-Pedersen
in Singapore; editing by Jane Baird, Sophie Hares, Tom Brown and Marguerita Choy)
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