Crude prices were dragged lower on Tuesday by the ongoing tensions between Ukraine and Russia as the market speculates the US and European Union sanctions against Russia may weigh on oil shipments. While the Northern American benchmark WTI fell for a second day in a row on forecasts that the US stockpiles climbed in the previous week.
The West Texas Intermediate (WTI) declined for a second straight session on Tuesday, falling at $98.08 per barrel on the New York Mercantile Exchange.
Brent for May settlement came in slightly higher but lost $1.97 to $106.24 a barrel on the ICE Futures Europe exchange, the lowest close since February 4.
Over the weekend, Ukraine’s Crimean region voted to split from Ukraine and Join Russia, however the Ukrainian government and the Western nations considered the referendum illegal, raising fears and concerns of an international backlash with Russia.
On Monday, the Crimean Parliament formally requested to join Russia, as the Russian President Vladimir Putin formally recognized Crimean sovereignty while the US and European Union imposed sanctions against Russian and Ukrainian officials whom the US says are threatening peace and security and officials that are linked to Crimea referendum.
“If Russia continues to interfere in Ukraine, we stand ready to impose further sanctions,” US President Barack Obama stated.
Crude inventories in US, the world’s largest oil consumer; are expected to have increased in the previous week by 2.8 million barrels. Meanwhile reports from the American Petroleum Institute are expected to be released later in the day.
The markets are also keeping an eye on the US Federal Reserve’s monthly two-day meeting which will begin later in the day. Analysts are expecting the central bank to continue to trim down its asset purchases further by $10 a month.
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