U.S. crude oil futures rose by more than $1 per barrel to its highest price in a week on Tuesday, following strong gains in equities outweighed forecasts for another build in domestic supplies, while Brent was bolstered by concerns over violence in Crimea.
Markets took confidence from comments by Russian President Vladimir Putin that he would not seize other regions of Ukraine outside Crimea, though a Ukrainian serviceman was killed after his base came under attack, showing the crisis was still volatile.
U.S. equities showed strong gains with all 10 primary S&P 500 sectors higher.
Traders awaited weekly U.S. government inventory data on Wednesday that was forecast to show domestic crude stocks rose last week by 2.6 million barrels at a time of low seasonal demand.
Estimated data was due out from the industry group the American Petroleum Institute later on Tuesday at 4:30 p.m. EDT (2030 GMT).
“We first rallied because stock market was going up, but reports of violence put the risk premium back in as well,” said Phil Flynn, senior energy analyst at Price Futures Group in Chicago.
U.S. crude settled $1.62 higher at $99.70 per barrel. Prices had mostly fallen in recent weeks since touching a five-month high of $105.22 on March 3 when worries of war in Ukraine peaked, and settled 81 cents lower on Monday.
Brent crude oil settled 55 cents higher at $106.79 per barrel, after hitting a six-week low on Monday.
Brent rose gradually after the death of the Ukrainian serviceman was reported, supported also by lower supply from the Middle East and North Africa.
The gains in U.S. crude lifted refined product prices. New York ultra-low sulfur diesel, commonly known as heating oil, rose nearly 2.5 cents to $2.9155. New York gasoline RBOB rose more than 2 cents to settle at $2.9028.
Defying protests by Ukraine and Western sanctions, Putin signed a treaty making Crimea part of Russia but told a joint session of parliament in the Kremlin he did not plan to seize any other regions of Ukraine.
The White House condemned Putin’s decision to annex Crimea, escalating tensions in a confrontation that traders worry could affect Russian energy exports to Europe.
Reuters
