Oil Jumps More than $2 on Ukraine War Risk

marinelink.com
Monday, March 03, 2014

Risk to oil flows seen low but Russia key supplier; Russian natural gas supply in doubt, European storage levels high. United States, Europe differ over trade sanctions.

Crude oil prices jumped more than $2 a barrel to multi-month highs on Monday, lifted by rising tension in Ukraine after Russian President Vladimir Putin declared he had the right to invade his neighbour.

Ukrainian Prime Minister Arseny Yatseniuk said Moscow's move to use military force was a "declaration of war" by Russia, one of the world's biggest oil producers.

Analysts say Russian supplies of oil to the rest of the world are unlikely to be disrupted by the Ukraine crisis but oil prices rose as most financial markets tumbled, with investors pulling out of riskier assets such as stocks.

Putin secured permission from his parliament on Saturday to use military force to protect Russian citizens in Ukraine and told U.S. President Barack Obama he had the right to defend Russian interests and nationals, spurning Western pleas not to intervene.

Brent crude hit a peak of $111.49 per barrel, its highest since Dec. 31, and was up $2.40 at $111.47 by 1145 GMT.

U.S. crude jumped as much as $2.06 to $104.65 a barrel, the highest since Sept. 23, before easing to $104.40.

"This is all about risk to supplies," said Commerzbank senior oil and commodities analyst Carsten Fritsch in Frankfurt.

"Russia is one of the world's largest oil producers, a huge exporter, and very important to Europe for its energy security."

Ben Le Brun, market analyst at OptionsXpress, agreed:

"Oil markets are reacting on the potential that the situation could worsen," he said.

"But I definitely suspect oil will move much higher, if it actually comes to war. U.S. crude could easily surpass $110 and a $120 target is not out of the question."

RUSSIAN GAS


The stand-off raised concerns over disruptions of Russian natural gas supplies to Europe, which would see a rise in demand for alternative fuels such as heating oil. The European Union gets roughly a quarter of its gas supply from Russia, mostly piped through Ukraine.

A relatively mild winter in Europe has reduced demand for heating fuel, with storage about 20 percent above last year's level at the main European gas hubs.

Russia exports around 5.5 million barrels of crude oil per day. Piped gas exports beyond the former Soviet Union totalled 15.8 billion cubic meters in January, official data showed.

Global Risk Management analyst Michael Poulsen said it was likely that oil prices would increase slightly further but then stabilise in the short term "before slowly retracing".

Obama and the leaders of Britain, Germany and Poland expressed "grave concern" on Sunday over Russia's intrusion into Ukraine, calling it a breach of international law and a threat to international peace and security.

The tensions come at a nervous time for markets as activity in China's factory sector slowed to an eight-month low in February, a government survey showed, reinforcing signs of a modest slowdown in the world's No. 2 economy as demand weakens.

The situation in Ukraine pressured Asian stocks on Monday, forcing anxious investors to cut their exposure to riskier assets in favour of traditional safe-haven bets such as the Japanese yen and Swiss franc.

By Christopher Johnson

 

Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Ocean Installer Enters Australian O&G Market

Ocean Installer’s said that it has established office in Perth, Australia to meet demand for subsea construction services.  “This is the beginning of our presence

Nordic Wins with Noble

Nordic Maritime, a leading offshore service operator, today announced a five year time charter for its DP2 IMR Subsea vessel, Mokul Nordic, which has been awarded by Noble Energy,

EUCAP Nestor Train 30 Somali Coast Guards

On 21 October, the European Union’s Maritime Capacity Building Mission in the Horn of Africa and Western Indian Ocean (EUCAP Nestor) celebrated the successful completion of a two month Mentoring,

Finance

Yara Reports Strong 3Q Results

Yara International ASA delivered strong third-quarter results, with record fertilizer deliveries and continued margin benefit from lower European gas price. "Yara

Lerwick Port Awards £16.5 mi Expansion Contract

Lerwick Port Authority has awarded a construction contract for the latest expansion of the harbour’s facilities in a project costing a total of £16.5 million

PDVSA Charters Another Algerian Crude Cargo

Venezuela's state-run oil company PDVSA has hired a supertanker to load a second 2 million-barrel cargo of Algerian crude, according to preliminary tanker fixture data.

Government Update

Bright Outlook for BWM Convention

The Danish Maritime Authority informed that the Ballast Water Management Convention is now one step closer to ratification following last week’s meeting of United

Chief of Naval Personnel Visits Naval Special Warfare

Chief of Naval Personnel (CNP) Vice Adm. Bill Moran visited Naval Special Warfare (NSW) Sailors during an all hands call on Joint Expeditionary Base Little Creek-Fort Story, Oct.

PDVSA Charters Another Algerian Crude Cargo

Venezuela's state-run oil company PDVSA has hired a supertanker to load a second 2 million-barrel cargo of Algerian crude, according to preliminary tanker fixture data.

Offshore Energy

Nordic Wins with Noble

Nordic Maritime, a leading offshore service operator, today announced a five year time charter for its DP2 IMR Subsea vessel, Mokul Nordic, which has been awarded by Noble Energy,

Pemex Suspends Eviction of Workers in Campeche

Due to the behavior shown by the low pressure system in the Gulf of Mexico, whose career was diverted in the last hours, the Technical Analysis Group Emergency

Total CEO Killed in Moscow Runway Accident

Private jet collided with snow plow during takeoff; Total's CEO a defender of Moscow policies. Insiders Boisseau and Pouyanne long seen as potential successors.

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Offshore Oil Pipelines Salvage Ship Electronics Ship Repair Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1526 sec (7 req/sec)