Share

Oil prices rebound on Ukraine tensions

London - Oil prices rebounded on Friday as escalating Ukraine-Russia tensions helped to offset an ample supply situation in the United States, traders said.

New York's West Texas Intermediate for delivery in June climbed 48 cents to $99.90 a barrel.

Brent North Sea crude for June won 82c to $108.58 a barrel around midday in London.

"The escalating conflict in east Ukraine is allowing oil prices to recover after finding themselves under pressure," said Commerzbank analyst Carsten Fritsch.

Ukraine, a major conduit for Russian natural gas exports to Western Europe, is monitored closely by investors who are concerned that a full-scale armed conflict will disrupt supplies and send energy prices soaring.

Ukraine on Friday launched a military assault on the flashpoint town of Slavyansk, raising the stakes in the showdown with Russia, which has vowed "catastrophic consequences" if Kiev stepped up operations.

Insurgents shot down two army helicopters, killing two servicemen, including a pilot, as the army tightened its noose around the rebel-held town of 160 000 people.

The pre-dawn offensive drew a sharp response from Moscow, where a spokesperson for President Vladimir Putin said it dealt a "final blow" to a deal clinched last month in Geneva meant to ease the crisis.

Oil prices had eased on Thursday after the US Department of Energy's weekly estimate of crude oil stockpiles showed a gain of 1.7 million barrels to 339.4 million - the highest weekly level since 1982 - indicating weaker demand in the world's largest economy.

That came a day after official data showed the US economy grew just 0.1% year-on-year in the first three months of 2014, much slower than the 2.6% in the previous quarter and well short of forecasts.

However, research house Capital Economics noted that the US Federal Reserve's statement on the economy "takes a more upbeat tone than the one issued after the last meeting in mid-March".

Wednesday's statement said the economy had "picked up" after a bout of fierce winter weather.

Traders were awaiting fresh jobs figures due out in Washington later on Friday for further signs of a US recovery.

It was hoped the non-farm payrolls figures would show a pick-up after flattening at the start of the year because of the weather.

Prices got some support in Asia after the release of figures showing manufacturing in both China and the United States picked up in April.

Washington also said consumer spending in the United States rose at its fastest pace in almost five years in March.

Downward pressure this week came also from an expected resumption of oil exports from a key terminal in Libya, the Zueitina port that has been shut down by protests for months.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.00
-0.5%
Rand - Pound
24.00
-0.5%
Rand - Euro
20.53
-0.3%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.5%
Platinum
903.65
+0.8%
Palladium
1,016.75
+1.5%
Gold
2,210.49
+0.7%
Silver
24.61
-0.1%
Brent Crude
86.09
-0.2%
Top 40
68,275
+0.9%
All Share
74,459
+0.7%
Resource 10
57,075
+2.5%
Industrial 25
103,782
+0.5%
Financial 15
16,515
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders