Oil Prices Rise on Crimea Libya Tensions

Oil Prices Rise on Crimea, Libya Tensions

Global oil prices climbed today as investors tracked unrest over Crimea and in Libya, awaiting the outcome of a Federal Reserve monetary policy meeting.

LONDON -- Global oil prices climbed today as investors tracked unrest over Crimea and in Libya, awaiting the outcome of a Federal Reserve monetary policy meeting.

New York's main contract, West Texas Intermediate for delivery in April, jumped $1.23 to $99.31 a barrel compared with Monday's close.

Brent North Sea crude for May delivery added 40 cents to stand at $106.64 in late London trading.

Crude futures had fallen on Monday as markets downplayed fears of disruptions to Western European energy supplies after Crimea voted in a disputed referendum to leave Ukraine and join Russia.

But on Tuesday, U.S. Vice President Joe Biden warned Russia that it faced the prospect of more sanctions over its move to absorb Crimea, calling it "nothing more than a land grab."

And he announced talks in coming weeks with European partners to discuss ways to ease their dependence on Russian natural gas supplies.

"The current pulse of the market suggests a consensus view that oil and gas will continue to flow, even directly through Ukraine," said Tim Evans of Citi Futures.

After Sunday's referendum -- slammed as a sham by the White House and the European Union -- Brussels and Washington issued sanctions on Russian President Vladimir Putin's inner circle on Monday.

Occupying also the minds of oil traders was news that Libyan crude production has dropped as the country struggles with rebels blockading eastern terminals since July, cutting exports from 1.5 million barrels a day.

"Libya is still presenting problems to the global market, as oil production in the country has dropped to just 250,000 barrels per day," said Joe Conlan, analyst at energy research group Inenco.

Traders were also awaiting the outcome Wednesday of the Federal Reserve's policy meeting.

Following a two-day meeting, the U.S. central bank is expected to further cut its massive stimulus program amid a slowly recovering economy, the world's largest crude-oil consumer.

Copyright Agence France-Presse, 2014

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