Oil diverges before US data

29th July 2014, Comments 0 comments

World oil prices diverged on Tuesday as traders balanced global demand fears against geopolitical concerns centred on Ukraine, analysts said.

Brent North Sea crude for delivery in September rose 17 cents to stand at $107.74 per barrel nearing midday in London.

US benchmark West Texas Intermediate for September fell 15 cents to $101.52 a barrel.

Singapore's United Overseas Bank said prices were hit by "concerns about global demand", but added that fears of tougher western sanctions against Russia over its support of separatist rebels in Ukraine were providing some support.

The European Union is expected to impose fresh measures against Russia on Tuesday, but there are concerns the move could hit the struggling eurozone economy as Russia is a key supplier of energy to the region.

Investors are also keeping an eye on the release of key US data, including on second quarter growth and job creation as well as consumer confidence in the world's biggest oil consumer.

Also, Wednesday will see the US Federal Reserve kick off its latest policy meeting. While bank policymakers are expected to keep interest rates at record lows and further cut their stimulus programme investors are hoping for an indication that monetary policy could be tightened soon.

Singapore banking giant DBS said there should be "no surprises" as the Fed has already signalled that it will end its massive economic stimulus measures later this year.

"The Fed has already telegraphed its intention to end asset purchases by October," DBS said, adding that its intentions would become clearer during its annual symposium on August 21-23 in Jackson Hole, Wyoming.

© 2014 AFP

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