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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter January 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

MHI's Entity to Oversee Material Handling Equipment, Engine and Turbocharger Businesses

Today Mitsubishi Heavy Industries, Ltd. (MHI) decided in principle to launch a new wholly owned entity to integrally oversee its current businesses in material

Globus Maritime Reclassifies Board Member

Globus Maritime Limited, a dry bulk shipping company, announced today that when Georgios Karageorgiou, a Class I director of Globus Maritime Limited  resigned on December 28,

First Panama Canal Water-Saving Basin Filled

The Panama Canal Authority (ACP) announced that the first water-saving basin of the Agua Clara Locks’ upper chamber has been filled to the required level in order

Finance

COSCO Plans European Transhipment Hub

China's COSCO is forging ahead with a plan to build a European transhipment hub, reports Reuters. The state owned shipping giant is expected to make an offer for

MISC Bhd: Revenue Up

Malaysia International Shipping Corporation Berhad (MISC Berhad), a shipping arm of Petronas, has seen an increase of 12.3 percent in its net profit for the 2015

Cosco Merger May Change Industry Dynamics

The merger between China Shipping group and the Cosco Group has given rise to a mammoth company that could trigger stability and extended consolidation in the global shipping industry,

Government Update

Canada Says Lifting Some Sanctions Against Iran

The Canadian government said on Friday it was lifting some sanctions against Iran, including the broad ban on financial services, imports and exports, making Canadian

China to Enforce Low Sulphur ECA in Yangtze River Delta

Vessels calling ports in China’s Yangtze River Delta, including Shanghai, will be required to burn low sulphur fuel while at berth from April 1 this year.   China’s

COSCO Also Eyes Greek Train Network

China's COSCO already the sole bidder for Greece's Piraeus Port. Buying both would give COSCO a European transhipment hub. China's COSCO is expected to make

Offshore Energy

HHI to Localise Main Equipment for Offshore Plants

Hyundai Heavy Industries and Doosan Heavy Industries Collaborate in Localizing Main Equipment for Offshore Plants   Seoul, South Korea – February 4 – Hyundai Heavy Industries (HHI),

FUGRO Wins BHP Pyrenees Contract

Fugro has been awarded a contract by BHP Billiton Petroleum Pty Ltd for the Pyrenees Phase 3 Installation Project.   The Pyrenees development is located offshore Western Australia,

Iqarus Acquires C-CHEC at Subsea Expo

Offshore and onshore health and medical solutions company Iqarus is set to acquire occupational hygiene consultancy C-CHEC to deliver a new integrated offering to global industries.

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Navigation Offshore Oil Salvage Ship Electronics Ship Repair Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | 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: 0.1122 sec (9 req/sec)