Brent holds above $108 on Ukraine tensions
Brent futures edged higher on Monday to hold above $108 a barrel as the deepening crisis in Ukraine led to supply disruption worries.
US benchmark West Texas Intermediate (WTI) gained amid the escalating wrangle that could see Washington and Europe impose punitive measures against selected Russian targets as early as Monday. This followed the US rejection of Sunday's pro-secession vote in Ukraine's Crimea region.
Oil was also supported by the International Energy Agency's (IEA) raising of its global oil consumption forecast for 2014.
Brent crude edged up 2 cents to $108.23 by 0601 GMT, up from Friday's close of $108.21. US crude futures were up 19 cents at $99.08 against $98.89 on Friday.
"Both are being given good support on higher risk" due to escalating tensions with Russia, said Tan Chee Tat, investment analyst at Singapore's Phillip Futures.
Several other nations also said they did not recognise the vote.
"With the overwhelming pro-Russian vote in the region clashing with the West's assertions that the referendum is not valid, expect further geopolitical risk-related support this week," said ANZ Research in a commodities daily report on Monday.
There could be no early end to the situation in Ukraine between the West and Russia, said Jonathan Barratt, chief executive of commodity research firm Barratt's Bulletin in Sydney.
This standoff would continue to buoy oil prices, he said, although a compromise would be expected at some stage.
"The Crimea has always been Russian. I don't think it's in anyone's interest to take a hard line," Barratt told Reuters.
Once the situation is resolved "oil will come under pressure again", Barratt said.
The wrangle over Ukraine and the Crimea dampened Asian shares on Monday which hovered around one-month lows with Japan's Nikkei falling by 0.7 per cent. European shares are expected to slip when they open on Monday, with Germany's DAX seen falling as much as 0.2 per cent from a five-month low hit last week.
The IEA raised its forecast for 2014 global demand growth to 92.7 million barrels per day in a report on Friday amid an improving global economy.
Investors will also be eyeing the Federal Reserve's two-day meeting which starts on Tuesday. Policymakers are likely to support the Fed's earlier decision to cut bond buying by $10 billion a month.
Tensions between the Libyan government and protestors which have blocked oil production over the past few months, cutting oil production to little over 200,000 bpd from 1.4 million bpd in summer, have buoyed oil prices Tan said.
But any shortfall from Libya would be "more than made up" by exports from Iran, Barratt said.
South Korea's crude imports from Iran surged 104 per cent in February to 1.1 million tonnes or 294,069 bpd, up 4.5 times from January and double from a year earlier, preliminary customs data showed on Saturday.
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