By Eric Yep
Crude-oil futures were choppy in Asian trading Monday because of the threat of wider sanctions on Russia and weak demand fundamentals.
On the New York Mercantile Exchange light, sweet crude futures for delivery in August traded at $102.88 a barrel at 0627 GMT--down $0.25 in the Globex electronic session. September Brent crude on London's ICE Futures exchange fell $0.02 to $107.22 a barrel.
Over the weekend European leaders threatened harsher sanctions against Russia after the downing of Malaysia Airlines Flight MH17. Oil markets fear this may affect energy supplies.
The "most severe possible consequence of deteriorating relations [with] Russia would be disruption to Russian energy supplies to the EU--whether as a result of...sanctions or Russian manipulation," Capital Economics senior commodities economist Caroline Bain said.
Disruption to energy trade will also affect Russia because its customers in Europe will seek oil and gas elsewhere, Ms. Bain said.
However, front-month Brent crude has been in contango for the past few days owing to a supply overhang from recent weeks and is unlikely to recover until end-user fuel demand picks up as summer peaks.
"We expect Brent-crude prices to average $111 a barrel over Q3. This forecast is based on a constructive market balance relative to the first half of the year," analyst Miswin Mahesh said. He expects the contango in the September-October Brent contract to narrow.
Later this week U.S. oil inventory data and manufacturing data from China will provide further cues for the oil market.
Nymex reformulated gasoline blendstock for August--the benchmark gasoline contract--rose 91 points to $2.8694 a gallon while August heating oil traded at $2.8499--47 points higher.
ICE gasoil for August changed hands at $879.50 a metric ton--down $4.50 from Friday's settlement.
Write to Eric Yep at email@example.com
(END) Dow Jones Newswires
July 21, 2014 03:23 ET (07:23 GMT)
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