Brent Higher As Diplomacy In Ukraine Looking Less Likely
Brent crude oil ticked up on Thursday morning as rising tension in Ukraine increased worries about supply interruptions. The commodity traded at $109.72 at 8:25 GMT as peace talks in Geneva began to look less and less worthwhile.
According to CNBC, Russia was building up its troops at the Ukrainian border after reports that three pro-Russian separatists were killed on Wednesday night. Leaders from Ukraine, Russia, the US and the EU are set to meet later on Thursday to discuss a diplomatic resolution.
Markets had put a lot of hope into a positive outcome, but in light of the new developments, the talks are not expected to alleviate the tension.
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Oil prices were also supported by Chinese data which showed that the nation’s economy rose 7.4 percent in the first quarter, which was above expectations.
Investors overlooked the fact that the nation’s GDP figure was its lowest in six quarters, and instead breathed a sigh of relief that the second largest oil consuming nation was picking up speed.
A weakening dollar also helped lift Brent after Federal Reserve Chair Janet Yellen confirmed that the Fed was planning to continue with its accommodative policy. At the bank’s last policy meeting, Yellen surprised markets by saying the bank may raise its interest rate within six months of finishing its tapering program.
The news shocked investors who were not expecting a rate hike so soon. However speaking in New York on Wednesday, Yellen said the US’ low inflation figures coupled with lack luster economic figures will keep the Fed’s interest rate low for quite some time.
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