Oil prices rebound in Asia

August 19, 2014 - 9:08:19 am

SINGAPORE: Oil prices rebounded in Asia Tuesday on bargain-hunting after tumbling on easing concerns about conflicts in Ukraine and Iraq, analysts said.

US benchmark West Texas Intermediate (WTI) for September delivery rose 38 cents to $96.79, while Brent crude for October was up 23 cents to $101.83 in afternoon trade.

WTI fell 94 cents in New York trade Monday, while Brent sank $1.93 in London to hit its lowest level since June 2013.

"We are seeing a continued trend in the past few days of gains in Asia-Pacific trading after overnight falls," Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP.

"Oil prices generally are continuing to fall with the dying down of geopolitical tensions in Ukraine and Iraq," McCarthy said.

A declaration by Ukraine last week that it had destroyed some Russian armoured cars had sparked fears that the simmering tensions between the neighbours could escalate into 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.

But talks late Sunday that also involved the foreign ministers of Germany and France concluded with an agreement for the sides to meet again and continue trying to de-escalate the worst East-West crisis since the Cold War.

Concerns over the ongoing Islamist insurgency in Iraq, the OPEC cartel's second biggest producer, have also eased, McCarthy said.

"The involvement of Western forces have caused significant setbacks for the jihadists," McCarthy said.

"Dealers are confident we won't see any major destabilising event in that conflict which could disrupt supply," he added.

Kurdish officials said their fighters, backed by US warplanes, have retaken the country's largest dam from the so-called Islamic State group, as the United States and Britain step up their military involvement.

The group controls large swathes of Iraq's north and west after a sweeping offensive that began on June 9. (AFP)

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