Crude prices up after escalation in Ukraine crisis

SINGAPORE- Oil prices rose in Asian trade Tuesday on concerns over a dramatic escalation in the Ukraine crisis that could potentially cause a disruption in gas supply and send energy prices soaring, analysts said.

US benchmark, West Texas Intermediate (WTI) for delivery in July, rose 12 cents to $104.47 in afternoon trade while Brent North Sea crude for July delivery rose 38 cents to $110.70 per barrel.

Financial markets in the United States and Britain were closed Monday for public holidays.

A fierce battle erupted in the rebel-held eastern belt of Ukraine Monday, just hours after president-elect Petro Poroshenko vowed he would not let the country become another Somalia.

Ukrainian fighter jets and combat helicopters struck the terminal building at an airport in the eastern city of Donetsk to try to dislodge scores of separatist gunmen who seized the complex, triggering hours of heavy firefights.

“The new president is making swift decisions to clamp down on the rebels,” Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.

“This might spur a rebuttal from Russia… we might be looking at further tensions rising,” Chua said.

Billionaire chocolate baron Poroshenko was on Monday confirmed by Ukraine’s election chief as the new president after polls over the weekend, which were triggered after pro-Russian leader Viktor Yanukovych was ousted in February.

Washington and its European allies supporting Ukraine’s interim Western-friendly government have accused Russia of fomenting unrest in the country, allegations Moscow denies.

Investors fear a full-blown conflict in the ex-Soviet state, a conduit for a quarter of European gas imports from Russia, will disrupt supplies and send energy prices soaring.