Brent crude oil reversed losses jumping back above $108 a barrel on Friday, as fighting in Ukraine and deteriorating relations between Russia and the United States ignited new fears of supply disruptions in the market.
A Russian security official was quoted as saying that up to 40 shells fired by Ukrainian forces fell on Friday on the Russian province of Rostov, near the border with eastern Ukraine where Kiev is fighting pro-Russian separatists. The latest round of headlines prompted a sudden rebounding rally in the oil market on both sides of the Atlantic, with Brent extending gains by over $1 and U.S. crude turning positive.
“The escalation of hostilities is stoking supply fears, as the energy card is waiting to be played by Russia and the West as a way to inflict economic harm on each other,” said John Kilduff, a partner at Again Capital LLC in New York.
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