LONDON: Brent crude oil rose towards $103 a barrel yesterday as escalating violence in Ukraine kept Europe’s markets on edge, but prices remained on track for a monthly loss as ample supply and weak demand outweighed political concerns.
The European benchmark oil contract had plunged more than 12 percent from a nine-month high in June to a 14-month low last week as weak demand led to an oil supply glut.
Prices rose yesterday after the government in Kiev said Russian troops had entered Ukraine in support of pro-Moscow rebels, intensifying a separatist war and prompting alarm among Kiev’s Western allies, as well as fears of new sanctions that could target Russia’s energy sector.
Russia is Europe’s biggest supplier of oil, coal and natural gas, meeting around a third of demand for all those fuels, according to EU data. It receives in return some $250bn a year, or around two-thirds of government revenue.
Brent for October delivery rose 45 cents to $102.91 a barrel by 1343 GMT and US crude gained 70 cents to $95.25 a barrel, underpinned by data showing second-quarter US economic growth was faster than initially reported.
US crude’s discount to Brent narrowed to $7.66 a barrel, having touched $7.44, the smallest amount in two weeks.
Even after yesterday’s increases, oil prices on both sides of the Atlantic were on track for a loss of around three percent for the month.
AGENCIES
