Brent futures rose today over investors’ concerns that increasing tensions in Ukraine could disrupt oil supplies from Russia.
Brent crude rose by 18 cents to $107.57 a barrel, while US oil settled at $98.22 a barrel, reported Reuters.
Russia has sent military troops to Ukraine’s Crimea region despite sanctions from the EU and the US, signalling a possible invasion.
However, its benchmark price is set for a third weekly loss due to slowing Chinese economic growth and rising US stockpiles.
Traders are worried about oil demand in China, the world’s second largest oil consumer, with signs of slowing economic growth in the country.
Data suggesting growth in the US retail and labour market raised optimism about the global economy, and reinforced expectations that the central bank would continue its asset-buying stimulus.
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US crude dropped to its lowest levels since early January, as the US Government released five million barrels from its strategic petroleum reserve, in a surprising move to counter the possible supply disruptions from Russia.
The contract was pressurised by a steep rise in US stockpiles, but it could receive some support from warnings that severe winter weather could extend into April, stagnating production in North Dakota.
The Department of Mineral Resources said that output from the Bakken and Three Forks shale region declined by approximately 5,000bpd in January, while December’s 55,000bpd drop is the biggest since the shale boom began.
According to Reuters, daily output from 12 of the main British and Norwegian crude streams in the North Sea will fall by almost 2% in April.
Since many refineries are set to undergo maintenance, traders believe that the fall would not provide adequate support to oil prices.
Image: Mounting Ukrainian crisis stokes fears over Russian oil supplies. Photo: courtesy of domdeen at FreeDigitalPhotos.net.