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Oil prices rise after eastern Ukraine independence vote

Monday, 12 May 2014 - 9:14am IST | Place: Singapore | Agency: PTI

  • hike-in-oil-prices-post-independence-vote Representational Image

Oil prices rose in Asia today after pro-Russian rebels in eastern Ukraine claimed a majority of voters in a disputed referendum chose independence, raising fears of a civil war that could disrupt supply.

New York's main contract, West Texas Intermediate (WTI) was up nine cents to USD 100.08 for June delivery in mid- morning Asian trading, while Brent North Sea crude for June gained 32 cents to USD 108.21 per barrel.

"With the risk of escalating geopolitical tensions in and around Ukraine... oil supplies could be disrupted," said Desmond Chua, market analyst at CMC Markets in Singapore. 

Rebels in the Donetsk province of Ukraine yesterday said a total of 89 per cent of voters there cast ballots in favour of self rule. 

There was no immediate word of results from Lugansk, the other province holding a similar referendum. But the vote for independence there was expected to be similar to Donetsk's, or even exceed it.

The two regions are home to seven million people, out of Ukraine's total population of 46 million.

The West fears these disputed votes could hasten the break-up of the former Soviet Republic and lead to a civil war on Europe's eastern edge, disrupting supplies and sending energy prices rocketing.

Singapore-based Phillip Futures said investors are also on edge due to Russian demands last week that Ukraine pay upfront for its future natural gas deliveries, because of billions of dollars in outstanding debts.

The announcement imperils supplies to a large swathe of the European Union because nearly 15 percent of all Russian gas consumed by the 28-nation bloc transits Ukraine. 

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