West Texas Intermediate (WTI) and Brent crude prices rose in early trading on a combination of geopolitical tensions in Ukraine and Libya.
Pro-Russian separatists continue to wreak havoc in Eastern Ukrainian regions of Donetsk and Luhansk. Masked insurgents set fire to a regional candidate’s office ahead of the May 25 presidential election. Separatists have controlled various buildings and television towers in roughly 15 cities in the self-proclaimed “Donetsk People’s Republic.” A pro-Russian separatist spokesman said that Alexander Boroday would be Prime Minister of the unofficial Republic.
The North Atlantic Treaty Organization (NATO) is growing increasing worried that referendums will invoke a land grab by Russia and its loyalists. “Guarantees given by Russia about sovereignty and integrity [cannot be trusted],” said secretary general of NATO Anders Fogh Rasmussen.
Brent seen its first weekly gain is about a month on increasing violence in Libya, which will likely further disrupt supplies. Libyan military police chief Mukhtar Fernana said he would suspend parliament after unrest broke out in the capital city of Tripoli. According to Michael McCarthy, chief strategist at CMC Markets, impaired production in Libya and escalation in Ukraine will promote crude upside this week. Libya’s oil production has fallen to 13 percent of capacity, or 215,000 barrels per day.