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Oil prices up on Ukraine tensions, rosy US data

business Updated: Aug 29, 2014 16:12 IST
Oil prices

Oil prices rose in Asia on Friday supported by renewed Russia-Ukraine tensions and upbeat US economic data, analysts said.

US benchmark West Texas Intermediate for October delivery was up 27 cents at $94.82 while Brent crude for October advanced 33 cents to $102.79 in afternoon trade.

Ukraine and the West said Thursday that Russian troops are actively involved supporting pro-Kremlin separatists who have been fighting against Kiev's rule since April.

NATO said at least 1,000 Russian troops were on the ground in east Ukraine but Moscow insisted none of its soldiers were in the country.

The United States warned it was considering new sanctions against Russia over the latest development.

Desmond Chua, market analyst at CMC Markets in Singapore, said fresh sanctions "may then trigger further retaliatory measures that would weigh on the euro bloc".

The intensified standoff between the neighbours, seen as the worst East-West crisis since the end of the Cold War, has sparked fears of a full-fledged war.

Such a development could cause energy prices to surge as Russia is the world's number-two oil producer, and Ukraine is a key conduit for Moscow's gas exports to Europe.

Stronger-than-expected US economic growth data meanwhile raised hopes for stronger demand in the world's largest oil consumer.

The US Commerce Department said Thursday the country's economy expanded at an annual rate of 4.2% in the second quarter, revising upward its July estimate of 4.0%.

Chua said the latest figure has placed the world's biggest economy "on track for growth forecasts which could spur a quicker pace of (monetary) tightening".

The US Federal Reserve has previously signalled that it will only hike interest rates late next year, but market watchers say robust US economic data could shorten the central bank's timetable.