Crude Oil Continues To Climb While Brent Oil Range Trades

                              Currency traders seem to be moving to the sidelines along with metal traders as they are overpowered by the ongoing geopolitical stress, with news flow at its peak and no one really sure what is happening minute to minute. Iraq remains in a state of turmoil. The new cold war between the west and Russia continues to widen as the eurozone and the US threaten more sanctions against President Putin. Negotiations with Iran over their nuclear capabilities have been postponed for four months, but remain in a positive light. Global leaders are calling on Hamas to accept an Egyptian brokered cease fire with Israel, as missiles continue to fly across the border and the Israeli ground action continues in Gaza. Crude oil traders seem very confused as prices jump up and down in radical movements. Brent oil remains at the bottom of its trading range as global oil supplies seem to remain undisturbed.Crude oil on the other hand added 47 cents this morning to climb above the $103 price level. Washington and the United Nations demanded an “immediate ceasefire” in Gaza early Monday as Israel pressed an assault on the enclave, pushing the Palestinian death toll to 509. At an urgent meeting on Gaza, the UN Security Council urged an “immediate cessation of hostilities” in a call echoed by US President Barack Obama in a telephone conversation with Israeli Prime Minister Benjamin Netanyahu.

Global oil prices fell further on yesterday on concern about an escalation of the Ukraine crisis after the downing of a Malaysian airliner last week, analysts said. Brent North Sea fell 30 cents to $106.94 a barrel in London midday deals. New York’s benchmark West Texas Intermediate reversed 18 cents to $102.95 per barrel from Friday’s closing level.

With the U.S. and Europe saying Ukrainian separatists are being supported by Russia oil markets are concerned about more sanctions. “Any interruption in Russian crude-oil or product exports off the sanctions, or possible Russian reaction to the sanctions, would certainly be a larger supply issue for Europe than the U.S.,” Citi Futures analyst Tim Evans said. US and European sanctions against President Vladimir Putin’s government, threaten to widen the crisis. Russia is the world’s second-biggest crude producer, and there are concerns its standoff with the West over Ukraine could affect supplies. Ukraine is also a major conduit for Russian gas exports to Europe.

Russia is a large oil and gas supplier to China. It also supplies gas and a lot of fuel oil for China’s small refineries. China’s purchases of Russian oil and gas are unlikely to be hit by sanctions and the main affect will be higher prices on the back of supply risk for a few days with no real lasting impact, Singapore-based traders said.

Asia’s oil demand this summer also continues to be weak with low margins in the physical market and a persistent supply overhang, traders said. Refiners, particularly in the Gulf Coast and Midwest, have been buying more oil in order to pump out more petrol to meet higher summer driving demand. Traders are scrambling to settle commitments by Tuesday’s deadline for crude deliveries under the August WTI contract, analysts said.

Meanwhile, natural gas prices sank further below $4 to trade at 3.836 on forecasts for cooler temperatures in parts of the U.S. Natural gas supplies haven’t been dropping as quickly this summer, as milder temperatures compared with last year reduce the need for homeowners to run the air conditioning full tilt. - fxempire