Oil prices rise on Ukraine fears

SINGAPORE- Oil prices rose in Asian trade Tuesday on renewed fears about Ukraine after pro-Russian protesters seized government buildings in the eastern city of Donetsk.

New York’s main contract West Texas Intermediate (WTI) for May delivery rose 46 cents to $100.90 a barrel in mid-morning trade and Brent North Sea crude for May gained 31 cents to $106.13.

The pro-Kremlin militants on declared independence and vowed to hold a vote on joining Russia, fueling concerns that Ukraine will fragment after Crimea was absorbed into its giant neighbor last month following a controversial referendum.

Since Russia took control of Crimea, several mainly Russian-speaking eastern regions in the ex-Soviet state have seen calls for similar votes by pro-Kremlin groups.

“The returning tensions in Ukraine are definitely providing some support to oil prices,” Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.

“Investors are watching closely for clues about Russia’s intentions regarding Ukraine,” he added.

Russian troops remain massed on its border with Ukraine, exacerbating fears of a military conflict.

With Ukraine a key conduit for Russian gas to Europe traders fear that any disruption to supplies will send oil and gas prices skyrocketing.

Russian deliveries account for 34 percent of the natural gas supplies to the European Union, according to the Soufan Group, a US-based intelligence firm.

Singapore-based Phillip Futures said concerns over Ukraine ensured crude prices “stayed well supported at elevated levels despite fears over the influx of Libyan crude into global markets”.

Rebels in Libya seeking regional autonomy agreed Sunday to allow the reopening of two of four oil terminals they have blockaded since July.

The deal allows for the immediate reopening of the Zueitina and Al-Hariga terminals, which have a combined oil export capacity of 210,000 barrels per day (bpd).

It also aims for a lifting of the blockade of Ras Lanouf and Al-Sidra ports, which together have a 550,000 bpd capacity, within two to four weeks.

Tripoli says the blockade since July has cost Libya more than $14 billion in lost revenues, slashing exports from 1.5 million to 250,000 bpd.