IN: Oil prices gain on fresh US sanctions against Russia
West Texas Intermediate (WTI) has today risen above $99 a barrel and is currently at $99.30. Brent crude also rose and a press time is trading around the $107 a barrel mark.
Both benchmarks are supported by speculation that oil supply disruptions from Russia may ensue as the United States expanded sanctions against the top energy and second-biggest oil exporter.
“The uncertainty is definitely back,” says Natixis commodities analyst Abhishek Deshpande. “The US has shown a willingness to intensify sanctions against Putin’s inner circle and may impose targeted penalties on businesses, including the energy sector.”
Earlier this week oil prices fell as the geopolitical tensions over Ukraine eased and traders shifted their attention elsewhere.
“The Ukraine risk premium has been almost fully erased over the past week as players turn their attention to softening fundamentals,” observes VTB Capital analyst Andrey Kryuchenkov. “We doubt individual bans and asset freezes will escalate to wider energy sanctions.”
WTI is right now trading 0.23 cents higher than at the start of the week. But Brent is set to log its fourth consecutive weekly loss, being currently down $1.20.
“The oil market seems largely to have arrived at the conclusion that Crimea is now Russian, there’s not much anyone can do about it,” states Global Risk Management analyst Michael Poulsen. “There will likely be other topics that will make oil move a whole lot more, but sanctions on Russian individuals and companies is not one of them.”
WTI crude may drop next week, according to a Bloomberg survey, on concerns that US crude oil inventories will increase. Of the 39 surveyed pundits and traders, 18 or 46 percent of them, forecast a decline in prices through 28 March.
