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

People & Company News

Cruise Ship Gets Within 298-miles of the N. Pole

Hapag-Lloyd Cruises say that their expedition ship 'Hanseatic' has set a new record for passenger ships in the Northeast Passage, when the 122.8-metre-long ship reached the northernmost point at 85°,

MNZ & AMSA Award McMurdo COSPAS-SARSAT Contract

McMurdo Group’s Techno-Sciences Inc. says it has been chosen by the Australia Maritime Safety Authority (AMSA) and Maritime New Zealand (MNZ) to deploy their next-generation

Panama Canal Infrastructure to be Valued by VRC

Leading provider of independent valuations, Valuation Research Corporation (VRC) says it has been engaged by the Panama Canal Authority to value the locks, dams,

Finance

Panama Canal Infrastructure to be Valued by VRC

Leading provider of independent valuations, Valuation Research Corporation (VRC) says it has been engaged by the Panama Canal Authority to value the locks, dams,

Box Ships on Slippery Containership Slope in Q2

"The reduced charters on the 'Box Queen', 'CMA CGM Marlin' and 'CMA CGM Kingfish' were the contributing factors to the 24% decline in our adjusted time charter revenues year over year,

Norwegian to Buy Prestige Cruises in $3b Deal

Norwegian Cruise Line Holdings Ltd (NCLH.O) said it would buy Prestige Cruises International Inc from its owner Apollo Global Management LLC (APO.N) in a $3 billion

Government Update

Shell CEO: US Should Export Oil, Embrace Global Markets

The head of energy company Royal Dutch Shell said on Tuesday that U.S. policymakers should lift the crude oil export ban because allowing the shipments would make global energy system more stable.

Polar Code Afoot

The IMO is on the verge of adopting the Polar Code, something that is important and long overdue. The International Maritime Organization (IMO), a specialized agency of the United Nations,

Algeria in Talks to Export Crude to Venezuela

Algeria is in talks to export crude oil to fellow OPEC member Venezuela, Algerian Energy Minister Youcef Yousfi said on Tuesday, confirming a Reuters report. Last week,

Offshore Energy

BW Offshore Awards SatCom Contract to Orange

Provider of floating production services to the oil and gas industry, BW Offshore, says it has signed a 5-year, $12 million contract with Orange Business Services

N-KOM Lays Keel for Qatar’s First Liftboat

Nakilat-Keppel Offshore & Marine (N-KOM) has achieved another milestone with the keel laying of its first liftboat newbuild project, awarded in July 2014 by long-time

Master Fined After Wind Farm Collision

The master of a wind farm support vessel has today been made to pay £3,000 in fines and costs after pleading guilty to breaches of maritime collision regulations.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Offshore Oil Port Authority Salvage Ship Electronics Ship Repair Shipbuilding / Vessel Construction Winch
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: 0.1460 sec (7 req/sec)