Oil prices recover from yesterday's sharp falls

Friday 15 August 2014 18.44
Oil prices rise on easing concerns about the Ukraine crisis
Oil prices rise on easing concerns about the Ukraine crisis

Crude oil prices rose on the Ukraine news, after Brent had stabilized close to a 13-month low on ample supplies of high-quality oil and signs that faltering global economic growth may cap fuel demand.

Brent North Sea crude for October rose €1.22 to $103.29 a barrel, US crude rose $1.15 to $96.73 a barrel.

US benchmark West Texas Intermediate (WTI) had tumbled by $2 yesterday while the Brent contract for September delivery fell $2.27 ahead of its expiry to its lowest closing level since June 2013. 

The sharp falls in oil prices yesterday coincided with the release of data showing growth in the euro zone stalled in the second quarter. 

Germany, the euro zone's largest economy, shrank by 0.2%, and France, the second-largest, had zero growth for the second consecutive quarter. 

Prices also came under pressure after the release of a string of disappointing Chinese data earlier in the week. 

Analysts said that risk premiums associated with the armed insurgency in Ukraine, a key conduit for Russian energy exports to Europe, were continuing to unwind. 

In a speech on Thursday, Putin said Russia would not "fence itself off from the outside world," despite a plunge in East-West relations over the pro-Kremlin insurgency. He said Moscow would not break ties with the US and Europe but "should also not let them treat us with disdain". 

Russia is the world's second-largest oil producer and there are concerns that tough Western sanctions against Moscow for its seizure of Crimea in March and support for separatists in east Ukraine could affect its gas exports to Europe.