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 June 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Lifting Specialists Modulift, IMES form Joint Venture

Lifting industry specialists Modulift and IMES have formed a joint venture to offer an integrated management service to clients internationally.   The two companies

Chinese PM Inks 2 Agreements During CMA CGM Visit

The CMA CGM Group hosted the Chinese Prime Minister, the French Foreign Affairs Minister and a ministerial delegation at its headquarters in Marseilles, July 1, the global shipping company announced.

Shell Green Lights GoM Field After Cost Cuts

Royal Dutch Shell has given the green light for the development of its largest platform in the Gulf of Mexico after making steep cost cuts which made the deep water

Finance

Charleston Harbor Deepening Gets US Funding

Charleston Harbor deepening project earns key federal funding for preconstruction engineering and design; U.S. Army Corps of Engineers allocates $1.303 million

Chinese PM Inks 2 Agreements During CMA CGM Visit

The CMA CGM Group hosted the Chinese Prime Minister, the French Foreign Affairs Minister and a ministerial delegation at its headquarters in Marseilles, July 1, the global shipping company announced.

Shell Green Lights GoM Field After Cost Cuts

Royal Dutch Shell has given the green light for the development of its largest platform in the Gulf of Mexico after making steep cost cuts which made the deep water

Government Update

Charleston Harbor Deepening Gets US Funding

Charleston Harbor deepening project earns key federal funding for preconstruction engineering and design; U.S. Army Corps of Engineers allocates $1.303 million

Chinese PM Inks 2 Agreements During CMA CGM Visit

The CMA CGM Group hosted the Chinese Prime Minister, the French Foreign Affairs Minister and a ministerial delegation at its headquarters in Marseilles, July 1, the global shipping company announced.

Kenyan Port Workers Strike Over Higher Health Costs

More than 2,000 workers at East Africa's biggest port in Kenya's coastal city Mombasa went on strike on Wednesday protesting an increase in the amount they will

Offshore Energy

Shell Green Lights GoM Field After Cost Cuts

Royal Dutch Shell has given the green light for the development of its largest platform in the Gulf of Mexico after making steep cost cuts which made the deep water

Statoil to Suspend Saipem Rig Contract

Norwegian oil major Statoil said on Wednesday it will suspend a rig contract with Italy's Saipem due to overcapacity in its rig portfolio. The suspension of

Monopiles Terminal to Be Built in Rotterdam

Sif and Verbrugge to build terminal for offshore wind energy on Maasvlakte 2   Sif Group, Verbrugge International and the Port of Rotterdam Authority have signed

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Navigation Pipelines Port Authority Salvage Sonar Winch
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: 0.4214 sec (2 req/sec)