MARKET WATCH: Oil futures climb on concerns about Russia, Ukraine conflict

Crude oil futures prices climbed on the New York and London markets July 21 upon the likelihood that the European Union might impose tighter sanctions against Russian businesses in response to suspicions that pro-Russia separatists contributed to the crash of a Malaysia Airlines passenger jet.

Officials from US intelligence agencies have suggested the jet was struck by a ground-to-air missile. Days before the crash, US President Barack Obama announced new sanctions against four Russian companies, including OAO Rosneft (OGJ Online, July 17, 2014).

Separately, US natural gas futures prices are below the $4/MMbtu, which analysts attributed partially to cooler summer temperatures than average and also to fuel switching by electric power generator.

“Natural gas demand in general is down because of the cool weather but the mix between natural gas and coal is shifting more toward natural gas,” Aaron Calder, a market analyst at Gelber & Associates, told the Wall Street Journal.

Energy prices

The New York Mercantile Exchange August crude oil contract climbed $1.46 on July 21, closing at $104.59/bbl. The September contract gained 91¢ to $102.86/bbl.

The natural gas contract for August decreased a dime to a rounded $3.85/MMbtu, which was the lowest settlement for the front-month gas contract since late November 2013. On the US cash market, gas at Henry Hub, La., was $3.84/MMbtu, down 7¢.

Cooler-than-normal temperatures across the US Midwest and East contributed to less demand for air conditioning and less demand for gas-generated electricity. Forecasts call for these unseasonal cool summer temperatures to continue into early August, analysts said.

Heating oil for August delivery climbed 1.36¢ to a rounded $2.86/gal. Reformulated gasoline stock for oxygenate blending for August delivery gained 3.1¢ to a rounded $2.89/gal.

The September ICE contract for Brent crude delivery was up 44¢ to $107.68/bbl. The October contract gained 60¢ to $108.08/bbl. The ICE gas oil contract for August dropped $4.50 to $879.50/tonne.

The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for July 21 was $105.07/bbl, down 47¢.

Contact Paula Dittrick at

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