Asian markets ease as oil prices struggle

HONG KONG, China—Most Asian markets dipped Thursday, with energy firms struggling after another sell-off in oil fuelled by concerns about a planned output cut.

Crude prices are slumbering at three-month lows after OPEC member Iraq and non-member Russia suggested this week they would not take part in any limitations, despite a painful global supply glut.

Their comments have raised questions about the viability of a last month’s agreement at oil cartel OPEC to reduce output, which sent prices soaring.

Both main contracts have tumbled more than three percent this week and news that US stockpiles had fallen more than expected last week was unable to provide any support.

“Iraqi demands to join the list of countries exempted from quotas have simply added to the uncertainty” that an output cut can be implemented, Research firm Capital Economics said in a commentary.

“We have long been sceptical of the chances of a game-changing deal and continue to forecast that both Brent and WTI will end the year back at around $45 per barrel.”

Regional energy firms extended recent losses. Hong Kong-listed CNOOC sank more than three percent, with traders also selling on the back of a weak earnings report.

PetroChina lost 1.5 percent in Hong Kong, while Sydney-listed Woodside Petroleum was 1.5 percent off and Santos lost one percent.

Among regional markets Tokyo ended the morning down 0.3 percent, Hong Kong shed 0.9 percent—extending a one percent loss Wednesday—and Shanghai slipped 0.2 percent.

Seoul, however, added 0.2 percent, boosted by market heavyweight Samsung Electronics’ two percent surge.

The firm confirmed a 30 percent plunge in third-quarter operating profit linked to its Galaxy Note 7 crisis but later announced its heir apparent JY Lee had joined the board, putting him a step towards control of the family-run conglomerate.

Lee Chaiwon, chief investment officer at Korea Value Asset Management said JY’s bigger role should provide a much-needed boost to the under-fire company, saying it “will become more market-friendly and will “quicken its restructuring process”.

The dollar rose against the pound, euro and other high-yielding currencies as a preliminary survey showing the key US services sector expanded in October reinforced expectations the Federal Reserve will lift interest rates before the end of the year.

Key figures around 0230 GMT

Tokyo – Nikkei 225: DOWN 0.3 percent at 17,341.23 (break)

Hong Kong – Hang Seng: DOWN 0.9 percent at 23,105.12

Shanghai – Composite: DOWN 0.2 percent at 3109.37

Euro/dollar: DOWN to $1.0897 from $1.0907 Wednesday

Dollar/yen: DOWN to 104.44 yen from 104.51 yen

Pound/dollar: DOWN to $1.2214 from $1.2242

Euro/pound: UP to 89.19 pence from 89.09 pence

Oil – West Texas Intermediate: Flat at $49.18 a barrel

Oil – Brent North Sea: DOWN four cents at $49.94

New York – Dow: UP 0.2 percent to 18,199.33 (close)

London – FTSE 100: DOWN 0.9 percent at 6,958.09 (close)

source: business.inquirer.net

Oil prices down as OPEC meeting awaited

NEW YORK, United States—Oil prices fell slightly on world markets on Tuesday, with investors taking profits after consecutive rises in recent days.

A barrel of West Texas Intermediate for September delivery fell 25 cents to $42.77 on the New York Mercantile Exchange, after having risen nearly a dollar and a half the day before.

In London, a barrel of North Sea Brent for October delivery fell 41 cents to $44.98 on the Intercontinental Exchange.

The slight declines followed Monday’s announcement of an unscheduled meeting next month by the Organization of Petroleum Exporting Countries, fueling speculation of measures to stabilize prices.

Russian Energy Minister Alexander Novak reportedly said his country would be willing to discuss a freeze if OPEC raises the matter.

After a bearish July, prices rebounded in recent days, following stronger-than-expected US hiring figures and a general reevaluation of the likelihood of a US interest rate hike.

“It’s quiet today. I think you may see a bit of profit taking,” said John Kilduff of Again Capital.

“This is a short-covering rally with record short interest in crude oil,” Kilduff said, adding that rumor of possible collaboration between Russia and OPEC was also influencing market decisions.

source: business.inquirer.net

Stocks down slightly after 5-day winning streak

NEW YORK — Stocks are falling slightly in morning trading Friday as the market breaks a five-day winning streak that sent major indexes to fresh highs. Bond yields climbed. Technology and consumer discretionary stocks are dropping the most.

KEEPING SCORE: The Dow Jones industrial average fell 2 points, or less than 0.1 percent, to 18,504 at 11:32 a.m. Eastern time. The Standard & Poor’s 500 index lost 3 points, or 0.2 percent, to 2,161. The Nasdaq composite fell 6 points, or 0.1 percent, to 5,028.

THE QUOTE: After the recent gains, “you have to be concerned. Are we going to see more slowing of the global economy?” said Bill Stone, chief investment officer at PNC Asset Management. “What is going to be the real impact of Brexit?”

SUPPLEMENT SURGE: Herbalife rose $9.21, or nearly 16 percent, to $68.57 after The Federal Trade Commission decided not to classify the nutritional supplements company as a pyramid scheme, as was alleged by investor Bill Ackman. The company did agreed, however, to pay $200 million to resolve allegations that it deceived consumers.

BANK BLUES: Wells Fargo fell $1.21, or 2.5 percent, to $47.73 after the consumer banking giant reported that second-quarter earnings fell.

INFLATION CHECK: The Labor Department reported consumer prices rose a modest 1 percent in June from a year ago, well below the Federal Reserve’s 2 percent inflation target. The Fed, which meets July 26-27, wants to see evidence that inflation is ticking up before raising interest rates.

SHOPPING MORE: The Commerce Department reported that U.S. retail sales rose a robust 2.7 percent in June from a year earlier. Consumer spending accounts for about two-third of economic output in the U.S., much higher than in many other developed countries.

ATTACK IN FRANCE: Trading was subdued in Europe after a man drove a truck into crowds celebrating Bastille Day along the beachfront of Nice, killing at least 84 people.

EUROPE SLIPS: France’s CAC-40 was down 0.6 percent while Germany’s DAX fell 0.2 percent. Britain’s FTSE 100 was flat.

TRAVEL SLUMP: Travel-related stocks fell in the wake of the attack. Cruise operator Royal Caribbean fell $1.26, or 1.8 percent, to $70.63 and Delta Air Lines fell 97 cents, or 2.4 percent, to $40.01.

CHINA GROWTH: The Chinese government says its economy expanded at a steady 6.7 percent in the April-June period as spending on construction by state-owned companies in the world’s second-largest economy helped compensate for weak private sector demand.

ASIA’S DAY: Japan’s Nikkei 225 rose 0.7 percent. The Hang Seng index in Hong Kong climbed 0.5 percent and South Korea’s Kospi index added 0.4 percent.

BONDS AND CURRENCIES: Bond prices fell. The yield on the 10-year Treasury note rose to 1.59 percent from 1.54 percent. The euro fell to $1.1076 from $1.1123 and the dollar rose to 105.93 yen from 105.43 yen.

ENERGY: Benchmark U.S. crude rose 38 cents to $46.06 a barrel in New York, while Brent crude, a standard for international oil prices, rose 44 cents to $47.81 a barrel in London. TVJ

source: business.inquirer.net

Equities pulled lower by oil, China concerns

NEW YORK - Global equities were lower on Monday, pressured by another downdraft in oil prices and worries over growth in China's economy, while the holiday season kept trading volumes muted.

Prices of both Brent and U.S. crude dropped more than 3 percent , reversing a brief rebound and dragging U.S. energy shares down 1.8 percent as the worst performing of the major S&P sectors.

Crude again moved within sight of an 11-year low. Brent settled at $36.62 and U.S. crude settled at $36.81 as last week's short-covering dried up and players worried that prices had more room to swoon.

"You have energy and tax-loss harvesting moving markets back and forth in these last few weeks," said Tim Courtney, Chief Investment Officer at Exencial Wealth Advisors, which oversees $1.4 billion in assets.

In contrast to oil, U.S. natural gas prices settled up 10 percent at $2.228 per million British thermal units as forecasts for colder temperatures led to bets that long-delayed winter weather was finally arriving.

The Dow Jones industrial average fell 23.9 points, or 0.14 percent, to 17,528.27, the S&P 500 lost 4.45 points, or 0.22 percent, to 2,056.54 and the Nasdaq Composite dropped 7.51 points, or 0.15 percent, to 5,040.99.

A weak batch of industrial profits raised concerns about China's economy and sent Chinese stocks lower by almost 3 percent, their biggest drop in a month.

Profits at Chinese industrial companies in November fell 1.4 percent from a year earlier, the sixth consecutive month of decline and another sign that the world's chief engine of growth for the past decade is sputtering.

MSCI's broadest index of Asia-Pacific shares outside Japan gave up early modest gains to fall 0.53, putting it on track for a 12-percent loss this year.

With trading light in the United States and Europe between Christmas and the upcoming New Year's holidays, as well as a holiday on Monday in the United Kingdom, markets could see exaggerated moves this week.

MSCI's all-country world index lost 0.22 percent, while the pan-European FTSEurofirst 300 index closed down 0.54 percent.

In Europe, the drop in oil prices put pressure on energy stocks such as Repsol and Total.

Yields on benchmark 10-year Treasury notes inched down to 2.2322 percent, up 3/32 in price.

The dollar edged lower against a basket of major currencies, off 0.03 percent at 97.951 as bullish bets on the currency this year on a U.S. Federal Reserve rate hike met year-end profit-taking.

But the drop in oil prices hurt currencies linked to the commodity, such as the Australian and Canadian dollars.

The Australian dollar fell 0.1 percent to $0.7248 while its Canadian counterpart fell 0.6 percent to $1.3902, heading back towards this month's 11-year lows.

Spot gold was down 0.7 percent at $1,068.19 an ounce and was on track for its sixth straight quarterly decline, its longest run of quarterly losses since the mid-1970s. —Reuters

Crude oil falls after US growth figures disappoint

TOKYO – Crude futures dropped in early Asian trading on Friday after the release of a report showing that US economic growth had slowed sharply, reinforcing concerns about sluggish demand in a world awash with oil.

US economic growth braked sharply in the third quarter as businesses cut back on restocking warehouses to work off an inventory glut, data showed.

Both of the main crude benchmarks are on track to post their first weekly gains in three weeks, but with oil still being added to inventories, prices are likely to be range-bound in the coming weeks, traders and analysts said.

US crude was down 24 cents at $45.82 a barrel at 0140 GMT, after rising 12 cents in the previous session. The benchmark is on track to post a gain of 2.7 percent this week.

Brent crude fell 11 cents to $48.69 a barrel after ending 20 cents lower on Thursday and is heading for an increase of 1.5 percent this week.

The sluggish US growth figures and weak home sales numbers have tempered the market's positive reaction to government figures earlier in the week showing oil stockpiles last week had increased by 3.4 million barrels, which was below the estimate from an industry group.

That had sent prices sharply higher with US crude rallying nearly $3 a barrel. – Reuters

Oil prices extend gains in Asian trade

Singapore – Oil prices climbed in Asia Monday boosted by a weaker dollar and expectations a rise in demand will ease a global supply glut, while investors await the release of key Chinese economic data this week.

Both main crude contracts have rallied since hitting six-year lows in late August, with last week seeing healthy rallies in line with global equities on waning expectations the US Federal Reserve will hike borrowing costs this year, pushing the dollar lower.

A softer dollar makes dollar-priced oil cheaper, spurring demand.

Comments by OPEC secretary general Abdullah el-Badri at the weekend that the cartel sees a "more balanced" oil market next year also provided support.

In afternoon Asian trade, US benchmark West Texas Intermediate for November delivery rose 0.89 percent to $50.07 and Brent crude for November added 0.91 percent to $53.13 a barrel.

Attention is on the release of Chinese trade and inflation data, which will give a fresh idea about the state of the world's biggest energy consumer. Confidence was given a lift at the start of the month by a report indicating the country's key manufacturing sector saw a slight improvement in September.

The news provided some cheer after a string of figures highlighting a sharp slowdown in Chinese growth. Fears about the Asian economic giant were inflamed in August when authorities devalued the yuan currency, raising questions about their grip on the crisis.

Bernard Aw, market strategist at IG Markets Singapore, said Monday's price rise was bolstered after el-Badri said Sunday: "OPEC is confident that it will see a more balanced market in 2016.

 "In recent months, there has been a contraction in production from non-OPEC producers and an increase in global demand."

The comments meant the oil producers' cartel – which accounts for about 40 percent of global production – "still sees stronger demand in the medium term", Aw told AFP.

Despite the recent uptick, oil prices remain depressed owing to concerns about demand as the global economy stutters, a supply glut and the weakness in China. – Agence France-Presse

source: gmanetwork.com

Oil prices weak on economic concerns, OPEC target on market share

SINGAPORE – Oil markets were weak on Friday as fresh signs that OPEC will continue to value market share over prices outweighed expectations of a lift when the United States kept interest rates at historic lows.

US West Texas Intermediate (WTI) crude futures were trading at $46.74 per barrel at 0535 GMT, down 16 cents from their last settlement. Brent prices were at $49.12 per barrel, up 4 cents.

Kuwait, a key producer of the Organization of the Petroleum Exporting Countries (OPEC), said on Thursday the oil market would balance itself but that this would take time, indicating support for the group's policy of defending market share despite falling prices.

Other sources at OPEC backed this view saying they expected oil prices to rise by no more than $5 a barrel a year to reach $80 by 2020, with a slowing in rival non-OPEC production growth not enough to absorb the current oil glut.

Oil prices were largely steady, though at low levels, during Asian trading hours despite the U.S. Fed keeping interest rates unchanged on worries over the health of the global economy.

Analysts had suggested a weaker greenback – a usual result of low interest rates – would support oil, as it makes dollar-traded crude cheaper for countries using other currencies.

Yet because the Fed's decision was based on economic concerns, some analysts and traders had a different view.

"Shockingly, one (Fed) official thinks rates need to be cut, and not raised, before the end of 2015. This puts into serious question if there will be any rate raise at all before the end of this year," said Howie Lee of Singapore-based brokerage Phillip Futures.

"The sluggish economy is bound to weigh one way or another," he added.

Also, US lawmakers may be only months away from lifting a four-decade-old ban on most oil exports, although the outlook for oil prices in 2016 and beyond suggests it may be years before traders care.

Front-month WTI crude futures have strengthened this week to their firmest versus Brent since the early days of the US shale oil boom, knocking off 70 percent of their discount to the global benchmark to around $2 per barrel. – Reuters

Oil falls as IEA warns stocks may approach all-time high

LONDON - Brent crude fell below $58 a barrel on Tuesday after the International Energy Agency (IEA) warned that oil prices may decline as stocks continue to increase this year.

Oil stocks held by countries in the Organisation for Economic Cooperation and Development may come close to the all-time high of 2.83 billion barrels in the middle of 2015, said the IEA, which advises the West on energy policy.

"Despite expectations of tightening balances by end-2015, downward market pressures may not have run their course just yet," the IEA said in a monthly report.

Brent crude LCOc1 slipped 44 cents to $57.90 by 1123 GMT (06:23 am. EST), ending a three-day rally. The benchmark gained more than 9 percent last week, its biggest weekly rise since February 2011.

U.S. crude futures CLc1 dropped to $52.02, down 84 cents.

Vitol chief Ian Taylor, speaking at the International Petroleum Week industry conference, said he expected a "dramatic" build in oil stocks over the next few months but that supply and demand in the oil market would move into balance in the second half of this year.

China's consumer inflation hit a five-year low for January, raising worries about oil demand in the world's second-largest economy.

"Economic activity is slowing, especially in heavy industry and that inevitably weighs on commodities," Michal Meidan, director of independent consultancy China Matters, said in the Reuters Global Oil Forum.

Oil prices received a boost on Monday after a monthly report by the Organization of the Petroleum Exporting Countries (OPEC) raised the forecast for 2015 demand for its oil to 29.2 million barrels per day (bpd), up 430,000 bpd from an earlier forecast.

The IEA's medium-term report released on Tuesday predicted demand for OPEC oil would hold at 29.4 million bpd this year, and said U.S. shale oil output growth would pause before regaining momentum.

U.S. crude snapped three days of gains after a preliminary survey showed that U.S. commercial crude stockpiles likely hit a record high last week.

"Another report of strong builds in inventories in this week's EIA market report could halt oil's rally," ANZ bank said, referring to the U.S. Energy Information Administration's stockpile data due on Wednesday.

Elsewhere, Libya's Hariga port has reopened after guards ended a strike over salary payments, and the terminal will start loading tankers once better weather allows, a facility spokesman said.  — Reuters

Oil steadies near $58 as US rig count offsets Chinese data

LONDON - Brent crude prices steadied near $58 a barrel on Monday as falling U.S. oil rig counts and signs of healthy U.S. growth offset concerns over the strength of the Chinese economy.

China's trade performance slumped in January, pointing to lower fuel demand in the world's biggest energy consumer. Exports fell 3.3 percent from a year earlier while imports tumbled 19.9 percent, highlighting a deepening slowdown.

But the falling number of U.S. oil rigs, at its lowest since December 2011, reduced the impact of the Chinese data on oil prices, which have dropped more than 50 percent since June.

Stronger-than-expected growth in U.S. jobs in January also helped support oil, as non-farm payrolls increased 257,000, outstripping Wall Street forecasts.

Global benchmark Brent crude oil LCOc1 for March was up 10 cents at $57.90 a barrel by 1118 GMT (06:18 a.m. EST) after rising as high as $59.06 earlier in the session. U.S. crude CLc1 was up 56 cents at $52.25 a barrel, having hit a session high of $53.40.

While signs of an economic slowdown in China depressed the market, analysts said crude import figures remained high and the disappointing data was unlikely to derail a rally in oil prices.

"I think we'll get a bit of a pullback. But will it send prices back to the lows? I'm not convinced about that," said Michael Hewson, chief market analyst at CMC Markets.

"We've had such a strong decline that some sort of bounce back is inevitable."

Brent rose more than 9 percent last week, its biggest weekly rise since February 2011. The North Sea oil futures contract has climbed more than 18 percent in the past two weeks, its strongest showing since 1998.

"It's still the same pattern," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt. "Markets are ignoring the bearish news and rather trade on the bullish news."

Preliminary Chinese January customs data came in at 27.22 million tonnes of crude imports, though estimates from Thomson Reuters Research and Forecasts put the final figure at about 30 million tonnes.

Reuters technical analyst Wang Tao said crude charts suggested the increase in prices may have ended for a while.

"I prefer a bearish bias," Wang Tao told Reuters Global Oil Forum. "Both WTI and Brent may correct in this week before seeking their next direction."  — Reuters

Oil prices rally above $55 as investors pile in

LONDON - Crude oil prices rose on Monday as investors shrugged off a U.S. refinery strike and focused on a falling U.S. rig count that signaled lower production down the line.

"There were a lot of people on the sidelines waiting for an opportunity to buy," said Bjarne Schieldrop, chief commodity analyst at SEB.

"Brent has struggled sideways for a long time but it closed above the 20-day moving average on Friday for the first time since July, and the rig count is falling sharply. So now they think, maybe this is the time to buy."

At 6:49 a.m. ET Brent crude futures were up $2.05 at $55.04 a barrel, after leaping as high as $55.62 and dipping as low as $51.41, as the bulls battled with the bears.

U.S. crude was up $1.50 at $49.74 a barrel, after touching an intraday high of $50.56 and slumping to $46.67.

Both contracts had rallied about 8 percent on Friday, fueled by month-end short-covering and a record weekly drop in the number of U.S. oil rigs employed, according to industry data from Baker Hughes. The count is now down 24 percent from its October peak.

"Most market observers have been surprised by the scale of the decrease, and expectations of U.S. oil output this year will no doubt be lowered accordingly," analysts at Commerzbank said in a note. "The foundation for a steady price recovery in the second half of the year has thus been laid."

However, in the short term the price increase has been exaggerated, as there is still considerable oversupply, they added.

Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas, said the bounce was mainly due to technical factors rather than any fundamental reason.

"I wouldn't be surprised if this afternoon we sell into (the rally) because the global fundamentals in oil and the economy haven't really changed much since last week," he said.

On Sunday, workers at nine U.S. refineries and chemical plants went on strike in an effort to pressure oil companies to agree to a new national contract.

"So far only a handful of refineries have been affected, but the last time they went on strike like this, in 1980, it lasted for three months," said Ole Hansen, senior commodity strategist at Saxo Bank.

Last week U.S. crude inventories hit a record high, and any dampening of refinery demand would likely push stocks higher as the slowdown in drilling has still not affected U.S. production, analysts said. [EIA/S]

"The market is likely too excited about falling rig counts," analysts at Morgan Stanley said in a note on Monday. "The most productive rigs will likely remain as long as possible."  — Reuters

Oil prices down in Asian trade

Singapore – Oil prices fell in Asia Friday after the OPEC oil cartel slashed its longer-term global demand outlook, while a stronger dollar also weighed, analysts said. 

The benchmark US futures contract, West Texas Intermediate for December delivery, dropped 28 cents to $77.63 while Brent crude for December eased 40 cents to $82.46 in late-morning trade.

The Organization of the Petroleum Exporting Countries  estimated in its annual world outlook Thursday that demand for its crude will fall from just above 30 million barrels per day in 2013 to 28.2 million in 2017, before starting to rise again.

The 12-nation group said the United States and Canada are the primary drivers of non-OPEC output
growth, in part due to shale-oil production.

Singapore's United Overseas Bank said "US and global crude prices resumed its decline" after the release of the report, adding to heavy losses earlier this week owing to price cuts by Saudi Arabia.

Prices were also under pressure from the stronger US dollar.

The US dollar bought ¥115.31 in late-morning Asian trade, from ¥115.16 in New York Thursday afternoon. The greenback has surged against the yen since last Friday, when the Bank of Japan ramped up its stimulus program.

A stronger greenback makes dollar-priced commodities like oil more expensive for buyers using weaker currencies, which in turn tends to hit demand and prices.

Investors are also keeping an eye on the release of October non-farm payrolls data Friday that is expected to paint an optimistic picture of the US economy.

Initial jobless claims fell 10,000 to 278,000 in the week ending November 1, the lowest level in 14 years, the US Labor Department said Thursday.

"The very positive weekly jobless claims data reinforced expectations for a potentially strong US October jobs report today which could bring forward rate hike expectations," UOB said. –  Agence France-Presse

source: gmanetwork.com

Oil prices tumble in Asia

SINGAPORE – Oil prices resumed their downward spiral in Asian trade Thursday following another massive sell-off in equities as traders grow increasingly concerned about the global economic outlook, analysts said.

US benchmark West Texas Intermediate (WTI) for November delivery fell 90 cents to a two-year low of $80.88 a barrel in late-morning trade. Brent crude for November retreated 43 cents to $83.35, levels last seen four years ago.

Both contracts have lost more than a fifth of their value since hitting 2014 highs in June.

Markets across Asia sank on Thursday, led by Tokyo, as a disappointing set of US data fanned worries that the effects of a slowdown in China, Europe and Japan are being felt in the world's top economy.

Traders took their lead from New York and Europe, where stocks and the dollar sank.

"WTI and Brent continued to open in red," Phillip Futures said in a market commentary. "With the current bearish conditions for crude oil, we expect this to continue," it said.

A rebound in Asian trade Wednesday failed to gain traction as it was overwhelmed by negative sentiment in the face of waning demand in China, the world's biggest energy consumer, and the eurozone.

Adding to the pain is a supply glut caused by strong US production of shale gas and a return of Libyan oil on to the market after facilities that were closed due to civil unrest resumed operations.

Members of the Organization of the Petroleum Exporting Countries (OPEC) are also maintaining output levels, while slashing prices to gain market share, analysts said.

Investors are awaiting the release later Thursday of weekly US crude inventories -- a closely watched barometer of demand and supply in the world's top oil consuming nation.

Phillip Futures said it expects prices for the US-centric WTI contract to remain supported at $80 for the rest of the day, but it was harder to plot a floor for Brent, which is more linked to the international market. – Agence France-Presse

source: gmanetwork.com

Oil prices up with Ukraine crisis in focus

SINGAPORE – Oil prices rose in Asia Wednesday, underpinned by concerns about the Ukraine crisis as fierce armed confrontation between government forces and pro-Moscow separatists continued unabated leaving dozens dead.

US benchmark, West Texas Intermediate (WTI) for delivery in July, rose seven cents to $104.18 in late-morning trade.

Brent North Sea crude for July gained 29 cents to $110.31 per barrel.

Ukraine's interim pro-Western government said Tuesday it had recaptured an airport in the eastern city of Donetsk from pro-Russian insurgents after a day of air strikes and fierce gun battles.

Donetsk mayor Oleksandr Lukyanchenko said two civilians and 38 combatants had died and another 31 were wounded, including Russians and possibly Chechens.

"Traders are still keeping an eye on Ukraine developments especially the continued fighting in the Eastern part as well as developments in Libya," said Singapore's United Overseas Bank in a note to investors.

The dramatic escalation in tensions comes a day after billion chocolate baron Petro Poroshenko was confirmed as the country's new president following weekend polls triggered after pro-Russian leader Viktor Yanukovych was ousted in February.

Washington and its European allies supporting Ukraine's interim government have accused Russia of fomenting unrest in the country, allegations Moscow denies.

Investors fear a full-blown conflict in the ex-Soviet state, a conduit for a quarter of European gas imports from Russia, will disrupt supplies and send energy prices soaring.

Kelly Teoh, managing director at I.R. Resources in Bangkok, said oil prices were also supported by hopes of a further drop in US crude stockpiles, indicating robust demand in the world's top crude consumer ahead of the busy summer driving season.

US crude stocks plunged 7.2 million barrels in the week to May 16, the Department of Energy revealed last week.

The weekly US official crude stockpiles report will be released on Thursday instead of Wednesday this week, because of the long Memorial Day holiday weekend. – Agence France-Presse

source: gmanetwork.com