Brent Steady With Geopolitical Tension In Focus
The tense situation between the U.S. and Russia after a passenger plane was shot down in Ukraine helped Brent crude oil climb toward $107 as traders kept a close eye on the growing conflict.
Brent crude oil traded at $106.92 at 8:15 GMT on Monday morning with geopolitical tension supporting the price.
According to The Wall Street Journal, U.S. Secretary of State John Kerry accused pro-Russian separatists of shooting down a Malaysian Airlines passenger plane using sophisticated missile technology likely provided by Moscow.
Speaking to several news outlets on Sunday, Kerry directly blamed the separatist groups, but did not point any fingers at Russian President Vladimir Putin and instead avoided confirming or denying whether or not the White House believes Putin was behind the act.
Despite the growing tension, most analysts believe the risk is already priced in and that the situation would need to dramatically worsen before it had the potential to cause a disruption to Russia’s oil supplies.
Most expect to see more EU sanctions on Russia in an effort to push Putin into using his influence to end the conflict.
However, gains were mitigated by data from both Europe and Asia that showed weak physical demand for crude. Both regions are struggling to get their economic growth back on track, but their stalling economies have had a major impact on crude demand.
Moving forward, investors will be keeping an eye on talks between world powers and Iran after the group failed to meet their July 20 deadline to reach a permanent agreement on Iran’s nuclear capabilities.
The two sides are struggling to agree on how Iran can curb its nuclear development in exchange for the removal of sanctions which were keeping the nation’s oil from the market.
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