Brent crude gained from the lowest close in more than 16 months as Russia and Ukraine took steps toward a cease-fire that may signal revived regional trade. West Texas Intermediate rose from the lowest since January.
Futures rebounded as much as 1.2 percent in London. Russian President Vladimir Putin and his Ukrainian counterpart Petro Poroshenko agreed on steps to reach a cease-fire, Putin’s spokesman Dmitry Peskov said today. An end to hostilities and economic sanctions could stimulate oil demand, said Olivier Jakob, managing director of Zug, Switzerland-based energy consultancy Petromatrix GmbH.
“In the short term, we’re worried about the European economy and the effect of sanctions on growth,” Jakob said. “If there was a solution found to the Ukraine crisis, that would end this round of sanctions and counter-sanctions between Europe and Russia.”
U.S. President Barack Obama said he wants a “follow-up” to the announcement. No halt in hostilities is possible if Russia continues backing rebels in neighboring Ukraine, Obama said today at a news conference in Tallinn, Estonia.
Brent for October settlement gained as much as $1.24 to $101.58 a barrel, and traded at $101.47 at 1:32 p.m. on the London-based ICE Futures Europe exchange. The contract closed yesterday at its lowest since hitting $99.95 on May 1, 2013. The European benchmark traded at a premium of $7.52 to WTI on ICE, compared with $7.46 yesterday.