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Crude gains on Ukraine unease, fears Libya fields will stay closed

Published 05/13/2014, 02:08 PM
Updated 05/13/2014, 02:09 PM
Geopolitical unease boosts crude, offsets soft U.S. data
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Investing.com - Crude futures rose on Tuesday due to fears that Ukraine unrest will escalate and affect Russian oil exports and on growing concerns that a deal between Libya and rebels to reopen oil ports will fall through, thus crimping global supply.

On the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in June traded at $101.35 a barrel during U.S. trading, up 0.76%. New York-traded oil futures hit a session low of $100.37 a barrel and a high of $101.51 a barrel.

The June contract settled up 0.60% at $100.59 a barrel on Monday.

Nymex oil futures were likely to find support at $99.76 a barrel, Friday's low, and resistance at $102.20 a barrel, the high from April 29.

Pro-Russian separatists claimed victory in a weekend referendum on self-rule in the eastern Ukrainian city of Donetsk, which stirred concerns that the country is sliding closer to civil war.

The vote has been condemned by Ukraine’s government and the West, which has threatened to hit Russia with fresh sanctions, underlining concerns over a disruption to supplies from the region.

Russia produced 10.4 million barrels of oil per day in 2012 and exported 7.4 million, making it the world’s second largest oil exporter after Saudi Arabia.

Meanwhile, Libya said earlier its western oilfields and ports were set to reopen.

Armed protestors have blocked the fields since March, and normal operations could hike Libyan crude output by 500,000 barrels per day (bpd).

While both sides recently brokered an agreement to resume oil shipments, the National Oil Corporation said the timing of any restart still remained unclear, which boosted crude futures by stoking expectations for Libyan supply to remain off the market for longer than expected.

Weak data in the U.S. failed to dampen oil's advance.

The Commerce Department reported earlier that U.S. retail sales rose just 0.1% in April, missing expectations for a 0.4% increase. Retail sales for March were revised up to a 1.5% gain from a previously reported increase of 1.2%.

Core retail sales, which exclude automobile sales, were flat in April, disappointing forecasts for a 0.6% increase. Core sales in March were revised up to a rise of 1% from a previously reported increase of 0.7%

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for July delivery were up 0.37% and trading at US$108.19 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$6.84 a barrel.

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