West Texas Intermediate oil (NYMEX:CLK14) traded near $104 a barrel amid speculation that tension between Ukraine and Russia is sufficiently priced into the market.
WTI traded in a 78-cent range. Deadly shootouts in eastern Ukraine during the weekend led to renewed calls in the U.S. for sanctions against Russia, as a diplomatic accord showed little sign of easing unrest. President Barack Obama’s administration said on April 18 that it will postpone a ruling on the Keystone XL pipeline that would bring Canadian crude to the U.S.
“The gun battles in eastern Ukraine and the announcement that a decision on Keystone pipeline will be delayed have been greeted by a deep yawn by the market,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “Prices have already risen to pretty lofty levels given the fundamentals. Uncertainty about the crisis in Ukraine should support prices and keep us from falling much.”
West Texas Intermediate for May delivery, which expires tomorrow, decreased 12 cents to $104.18 a barrel at 9:16 a.m. on the New York Mercantile Exchange. The more active June contract slipped 9 cents to $103.28. The volume of all futures traded was 31 percent below the 100-day average.
Brent (NYMEX:SCK14) for June settlement declined 17 cents to $109.36 a barrel on the London-based ICE Futures Europe exchange. Volume was 75 percent below the 100-day average. Trading on both Nymex and ICE was closed on April 18 for Good Friday.
WTI for June delivery traded at a $6.08 discount to the Brent contract for delivery the same month.
At least three people were killed in a clash in Slovyansk in eastern Ukraine, according to the Interior Ministry, while a senior security official accused Russia of exploiting the violence to prepare grounds for an invasion.
After negotiations in Geneva on April 17, diplomats from Ukraine, the U.S., the European Union, and Russia called for illegal groups in Ukraine to disarm, return seized buildings to their owners and free occupied public places. In line with the pact, the government in Kiev prepared an amnesty law for pro- Russian protesters.
The U.S. government’s decision to delay a ruling on Keystone may push back until after the November midterm elections a decision on the $5.4 billion project that pits the president’s environmental supporters against labor backers who want construction jobs.
The State Department said on April 18 it would postpone making a recommendation until questions are resolved about the way the pipeline’s northern route through Nebraska was approved. The southern portion of the project began moving crude to the Texas Gulf Coast from Cushing, Oklahoma, in January.
--With assistance from Anthony DiPaola in Dubai.
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