The price of crude oil rose Monday as escalating Russia-Ukraine tensions and the resignation of Libya’s interim prime minister added to uncertainties about oil supplies.
Benchmark U.S. crude for May delivery was up 69 cents at US$104.43 a barrel at 4:13 a.m. ET in electronic trading on the New York Mercantile Exchange. The contract rose 34 cents Friday to close at close at $103.74.
Ukraine’s government announced Sunday it was sending in troops to try to quash a pro-Russian insurgency in eastern Ukraine despite warnings from the Kremlin. Markets have been rattled by concern Western sanctions against Moscow might disrupt Russian exports of oil and gas.
Desmond Chua, market analyst at CMC Markets in Singapore said the tensions helped to push up oil prices. Russia is a crucial supplier of oil and natural gas to Europe
“I guess we have seen a slight increase in the geopolitical premium,” Chua said.
“We also have fears about the resignation of Libya’s prime minister, in that sense adding on to the uncertainty in its oil supplies,” he said.
Abdullah al-Thinni was the second Libyan prime minister to resign within two months, underlining the nation’s instability after the fall of Col. Muammar el-Qaddafi in 2011.
Libya is part of the 12-member Organization of the Petroleum Exporting Countries, the group that produces 40 per cent of world oil supplies. Signs that Libyan oil production would return to normal levels helped to lower oil prices last week. But government instability is likely to delay the handing back of refineries currently controlled by militias.
In other energy futures trading in New York:
— Wholesale gasoline was up 1.5 cents at $2.991 a gallon.
— Natural gas was down 1.1 cents at $4.609 per 1,000 cubic feet.
— Heating oil rose 2.8 cents at $2.962 a gallon.