Oil prices on Tuesday climbed as geopolitical tensions over Ukraine escalated.
The West Texas Intermediate for March delivery added 1.28 dollars, or 1.4 per cent, to settle at 92.35 dollars a barrel on the New York Mercantile Exchange, on its expiration day. Brent crude for April delivery increased 1.45 dollars, or 1.5 per cent, to close at 96.84 dollars a barrel on the London ICE Futures Exchange. The front-month contract of the international benchmark notched its highest finish since September 29, 2014, according to Dow Jones Market Data.
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The oil rally came amid concerns over the ongoing Ukraine crisis, Xinhua news agency reported. Russian President Vladimir Putin on Monday evening signed decrees recognising the independence of two self-proclaimed regions in eastern Ukraine's Donbass as "the Lugansk People's Republic (LPR)" and "the Donetsk People's Republic (DPR)".
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"This constitutes a noticeable escalation of the Russia-Ukraine conflict and is likely to see the West respond by imposing tough sanctions on Russia. It also raises the risk of disruptions to Russian oil and gas shipments," Carsten Fritsch, Energy Analyst at Commerzbank Research, said Tuesday in a note.