London - AFP
Oil dipped Tuesday but remain underpinned by concern that the Ukraine crisis could potentially cause a disruption in gas supply and send prices soaring, analysts said. The US benchmark, West Texas Intermediate (WTI) for delivery in July, slid 30 cents to $104.05 a barrel. Brent North Sea crude for July dipped 13 cents to stand at $110.19 a barrel in London early afternoon trading. "As the escalating crisis in Ukraine continues, we expect high volatility and nervous trading conditions in the oil market," said analyst Myrto Sokou at the Sucden brokerage in London. A fierce battle erupted in the rebel-held eastern belt of Ukraine Monday, just hours after president-elect Petro Poroshenko vowed he would not let the country become another Somalia. Ukrainian fighter jets and combat helicopters struck the terminal building at an airport in the eastern city of Donetsk to try to dislodge scores of separatist gunmen who seized the complex, triggering hours of heavy firefights. Billionaire chocolate baron Poroshenko was on Monday confirmed by Ukraine's election chief as the new president after polls over the weekend, which were triggered after pro-Russian leader Viktor Yanukovych was ousted in February. “Following a successful presidential election on Sunday, newly elected Ukrainian president, Petro Poroshenko, claimed he will resolve conflicts between Russia and Ukraine in a ‘matter of hours’, giving hope for a hasty end to the unrest," said Inenco oil analyst Chloe Bradley. “Although air strikes in Ukraine yesterday initially raised concerns over an escalation in violence, Poroshenko’s government seemed to gain control of the situation, regaining ownership of the airport. "It is likely Poroshenko’s determination to end the violence quickly has had an effect on oil prices.” Washington and its European allies supporting Ukraine's interim Western-friendly government have accused Russia of fomenting unrest in the country, allegations Moscow denies. Investors fear a full-blown conflict in the ex-Soviet state, a conduit for a quarter of European gas imports from Russia, will disrupt supplies and send energy prices soaring.