Brent Slips Modestly On Profit Taking

Profit taking took Brent crude oil lower on Monday morning, but the commodity was well supported by concerns about the situation in Ukraine. Brent traded at $109.19 at 7:50 GMT as investors worried that the agreement between Russia and Ukraine, made just last week, could be shaken by gun battles in Ukraine.

CNBC reported that three people have been confirmed dead after a gunfight broke out in a Ukrainian city controlled by pro-Russian separatists. The clash could erase progress the two sides made last week at a conference in Geneva, which would put them back at a military standoff.  Ukrainian and Russian diplomats agreed last week that they would deescalate the situation through open dialogues between Russian separatists and the Ukrainian government.

Gains from uncertainty in Ukraine were mitigated by an improving supply outlook as more oil is expected to enter the market from Libya, Iran and Iraq over the coming weeks.

In Libya, oilfields are slowly being returned to the nation’s government after being shut down for eight months by anti-government rebels. The north African OPEC member’s oil exports were depressed to less than half of their normal capacity as protesters demanded more rights. The government reached a deal with the rebels two weeks ago, and so far the ports have been opening as planned. The only hitch has been technical problems at the nation’s Zueitina port, which have thus far kept the plant from reopening.

Iran will also be contributing more crude to the global market as the nation is set to permanently shed some of the strict sanctions that have kept the nation’s oil from reaching the market for nearly a decade. Iranian officials and world powers are expected to meet in New York next month in order to draft a long term agreement on the nation’s nuclear development program.