Sunday, October 4th15.5°C

Oil price holds gain for the week on Middle East, Russia-Ukraine tensions

NEW YORK, N.Y. - The price of oil retreated slightly Friday but remained elevated because of political turmoil around the world.

Concern that conflicts and rising tensions in the Ukraine and the Middle East could disrupt supplies sent oil prices higher this week, though the world appears to have an ample supply of crude and supplies have not been affected.

The industry calls this higher price, based only on fear, a "risk premium."

"Developments during the past couple of days have added to a long list of geopolitical hot spots," wrote energy analyst Jim Ritterbusch in a note to clients, which he says "will force the oil complex to maintain significant amount of risk premium."

Benchmark West Texas Intermediate crude for August delivery fell six cents to close at US$103.13 a barrel Friday on the New York Mercantile Exchange. The U.S. benchmark was up 2.2 per cent for the week.

Brent crude for September delivery, a benchmark for international oils, fell 65 cents to close at US$107.24 on the ICE Futures exchange in London.

U.S. crude closed under $100 per barrel Tuesday for the first time since May, but that marked the end of a three-week slide. A large draw in U.S. oil inventories pushed prices higher Wednesday and then a string of political events gave the market more jitters.

The Obama administration announced increased sanctions on Russia Wednesday, including against Russia's largest oil company, over Russia's support of rebels in Ukraine.

Then a Malaysian Airlines passenger plane was shot down over Ukraine on Thursday, raising concerns that a wider conflict or further sanctions could disrupt supplies from Russia, the world's biggest crude exporter outside of OPEC.

And later Thursday Israel launched a ground offensive into Gaza, intensifying turmoil in the Middle East, the world's most important oil-producing region.

These threats to global oil production remain just threats, and analysts say the likelihood of supply interruptions is small. But it's enough for buyers to buy more oil futures now, to protect against an actual disruption that could sends prices rocketing even higher.

"Crude oil prices are expected to continue their recent uptrend due to increasing volatility in the oil market following the uncertainty in Middle East and highly tentative conditions between Ukraine, Russia and the West," said analyst Myrto Sokou from Sucden Financial Research in London.

In other Nymex trading, wholesale gasoline fell 2.2 cents to close at US$2.860 a U.S. gallon (3.79 litres), heating oil fell 1.4 cents to close at US$2.845 a gallon and natural gas fell 0.3 of a cent to close at US$3.951 per 1,000 cubic feet.


The Canadian Press

Read more Business News


Recent Trending

Today's Market
S&P TSX13339.74+97.85
S&P CDNX525.56-0.33
S&P 5001951.36+27.54
CDN Dollar0.7590-0.0012
Natural Gas2.459+0.026

Okanagan Companies
Pacific Safety0.215+0.000
QHR Technologies Inc1.19+0.01
Metalex Ventures0.06+0.00
Russel Metals21.48-0.07
Copper Mountain Mining0.42+0.03
Colorado Resources0.08+0.01
ReliaBrand Inc0.004-0.000
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.095+0.005
Decisive Dividend Corp3.49+0.45
Diamcor Mining0.90+0.02


2432768Cozy 2 Bed Home in Westpoint MHP
more details
Click here to feature your property
Please wait... loading

Living beyond 100

Photo: ContributedThere was a time most careers involved an apprenticeship of one sort another. Some official, others involving years of servitude, and others time simply spent watching and emulating ...

Collateral mortgage

Photo: Thinkstock.comMost of the time I recommend that my clients not take a collateral type mortgage product, as it locks you in with the current lender and at maturity the mortgage is costly to tran...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...




Member of BC Press Council