Price of Oil Jumped after Escalation of the Conflict in Ukraine

Oil prices rose sharply in Asian trade today after Russian President Vladimir Putin signed a decree last night recognizing the independence of the Donetsk and Luhansk People's Republics that seceded from Ukraine, and later ordered Russian troops to enter their territories to “keep the peace,” CNB reported.

Putin Recognizes the Donetsk and Luhansk Republics as Independent States

The North Sea Brent, which is the European reference, rose 1.5 percent to $96.82 a barrel, and US light crude rose 3.22 percent to $94.

Both oil grades are close to two-week highs from the fall of 2014, with Brent reaching $96.78 a barrel and US oil reaching $95.82 a barrel.

Military Columns are already Moving in Donbas

Russia has amassed about 150,000 troops along the border with Ukraine, prompting politicians and analysts to argue that the Kremlin may not be satisfied with Donetsk and Luhansk alone.

The threat of a major war is inevitably pushing up oil and natural gas prices, as Russia is one of their largest producers and Europe's main supplier, especially of natural gas.

According to Andy Laipow, president of Lipow Oil Associates, if the crisis deepens, oil could reach $110 a barrel.

At the same time, Russian Energy Minister Nikolai Shulginov said in an interview with Energy Intelligence, quoted by TASS, that for Russia the optimal price of oil is between 55 and 70 dollars per barrel.

/BTA

Follow Novinite.com on Twitter and Facebook