Brent Moves Following Crimean Vote
Brent crude oil settled above $108 after Ukraine's Crimean peninsula voted to leave Ukraine and join Russia over the weekend.
The commodity traded at $108.08 at 5:51 GMT as investors worried about the possibility of supply interruptions due to the deepening crisis in Ukraine.
More than 95 percent of Crimean citizens voted to join Russia on Sunday in a move that escalated tension in the region and irked Western lawmakers who are refusing to recognize the vote. The US and Europe are planning to enact economic sanctions as early as Monday to retaliate against Moscow after what they called an illegal election that took place under military duress.
Now, it remains to be seen how quickly Russia will annex the small peninsula. Most lawmakers are hoping Russian President Vladimir Putin will take his time and conduct negotiations with Ukrainian leaders as well as other countries in the meantime, but some say the Kremlin would be able to make the change in a matter of weeks.
Adding to Brent's buoyancy was the International Energy Agency revised forecast for 2014 global demand. Reuters reported that the agency increased its 2014 global demand growth to 92.7 million barrels per day on Friday, citing an improving global economy.
Tension in Libya also continued as the nation's government looked to calm protests which have more than halved the nation's oil output since the summer. With no quick resolution in sight, most expect that the nation will continue with depressed output, however new exports from Iran will likely more than cover any gap in the market.
Gains were mitigated as investors geared up for the US Federal Reserve's upcoming policy meeting, set to begin on Tuesday. Most are expecting the bank to decide to continue reducing its asset purchase program by $10 billion per month at the meeting.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.