Tension in Ukraine, Iraq and Libya hikes oil prices

Tension in Ukraine, Iraq and Libya hikes oil prices

Tuesday, August 26, 2014 12:52 pm

Oil  prices rose on Tuesday on geopolitical tensions in crude producers Iraq and Libya as well as Ukraine, a key conduit for Russian gas exports to Europe, dealers said.

However, market gains were capped by ongoing jitters over abundant crude supplies and weak demand amid poor global economic data.

Brent North Sea crude for October added 19 cents to stand at $102.84 per barrel in midday London deals.

US benchmark West Texas Intermediate for October delivery gained 25 cents to $93.60 a barrel.

Oil prices rise

Oil prices rise

“Brent crude has ticked up … deriving support from hawkish developments in both geopolitical crises in Ukraine and Libya, despite abundance in supply and forecasted waning demand on subdued economic data from Europe and the United States,” said Inenco analyst Dorian Lucas.

The oil market also pushed higher as dealers awaited US data for clues on whether the Federal Reserve will speed up its timetable for raising interest rates, analysts said.

Data on US durable goods orders in July, the 20-city Case-Shiller home price index for June, as well the Conference Board’s reading of consumer confidence for August are all due for release later Tuesday.

Revised US gross domestic product figures for the second quarter of the year are also out on Thursday.

Analysts said the data will be pored over for clues on how well the world’s biggest economy is faring and when the Fed will hike interest rates.

Fed chairman Janet Yellen last week signalled her commitment to raising rates late next year, but market watchers say robust US economic data could shorten the central bank’s timetable.

“The Fed’s expectations are still data dependent,” Singapore’s DBS Bank said in a note. “Tonight’s US durable goods and consumer confidence will be closely watched,” it said.

“Close attention will also be paid on how much the advance estimate for Q2 GDP growth will be revised down.”

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