Brent crude headed for its first weekly advance this month amid speculation that escalating tension in Ukraine may disrupt supplies from Russia, the world’s biggest energy exporter. West Texas Intermediate was set for a second weekly gain after Cushing stockpiles fell.
Futures were little changed in London and are up 1.4 percent this week. Ukrainian forces moved to flush separatists from their eastern holdouts as diplomats from the U.S. and U.K. vowed to punish Russia with industry-wide sanctions if this month’s presidential election is undermined. Global demand for OPEC’s crude will be stronger in the second half of 2014 than previously estimated, the International Energy Agency said yesterday.
“In the run up to the elections next week the tensions will continue,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said by e-mail. “Even after the presidential elections it’s unlikely to calm down. So this factor of instability is likely to stay.”
Brent for July settlement was 32 cents higher at $109.41 a barrel on the London-based ICE Futures Europe exchange at 12:35 p.m. London time. The volume of all futures traded was about 29 percent above the 100-day average for the time of day. The June contract expired yesterday after climbing 25 cents to $110.44.
WTI for June delivery rose 21 cents to $101.71 a barrel in electronic trading on the New York Mercantile Exchange. Prices have gained 1.8 percent this week. The U.S. benchmark crude’s July contract was at a discount of $8.09 to Brent on ICE.