West Texas Intermediate and Brent crude headed for the first weekly gain in a month after a Malaysian Air passenger jet was shot down in Ukraine and Israel sent ground forces into the Gaza Strip.
WTI futures rose as much as 0.7 percent in New York, extending a 2 percent increase yesterday, the most since June 12. The Boeing Co. 777 crashed en route to Kuala Lumpur from Amsterdam in the main battleground of Ukraine’s civil war, threatening to escalate tensions in Europe’s worst geopolitical crisis since the end of the Cold War. Israel’s movement of troops and tanks into the coastal enclave marks the first significant ground operation in Gaza since 2009.
WTI for August delivery rose as much as 75 cents to $103.94 a barrel in electronic trading on the New York Mercantile Exchange and was at $103.73 at 2:58 p.m. Singapore time. The contract increased $1.99 to $103.19 yesterday, the highest close since July 8. The volume of all futures traded was more than double the 100-day average. Prices are up 2.9 percent this week and 5.4 percent higher this year.
Brent for September settlement climbed as much as 73 cents, or 0.7 percent, to $108.62 a barrel on the London-based ICE Futures Europe exchange today. Prices are 1.6 percent higher this week. The European benchmark crude traded at a premium of $5.71 to WTI for September, compared with a front-month spread of $5.83 on July 11.
Brent advanced 2 percent on March 3 after Ukraine mobilized its army reserves as Russia, the world’s biggest energy exporter, seized control of the Black Sea region of Crimea. Ukraine’s state security service said it intercepted phone conversations among militants discussing the missile strike, which knocked Flight 17 from the sky about 50 kilometers (31 miles) from the Russian border. U.S. officials said the weapon probably was a Russian-made model used widely in eastern Europe.
The U.S. and European Union this week imposed sanctions on Russian banks and energy and defense firms in the latest attempt to punish the country over Ukraine. OAO Rosneft, Russia’s largest oil company, and natural gas producer OAO Novatek are among those hit by the penalties.