Brent Finds Some Support As Situation In Ukraine Worsens

Brent crude oil began the week below $85, but received some support from growing geopolitical tension around the world. The commodity traded at $84.01 at 8:00 GMT on Monday morning as conflicts in both Libya and Ukraine escalated.

CNBC reported that Libya’s El Feel and El Sharara oilfields have been shut down in the wake of growing tension between rebel groups and the government. The nation’s Hariga port output has been significantly reduced, with exports down 120,000 barrels per day on Saturday.

Tension also rose in Ukraine where a two-month-old ceasefire looked likely to fall apart after the separatist-held city of Donetsk saw its worst shelling in two months over the weekend. Ukrainian officials reported sightings of unmarked troops, something Kiev claims is evidence that Russia is sending in troops to support the rebel fighters. Russia has denied any involvement, but the Ukrainian government said the nation has sent over a number of tanks and armored vehicles as well as truck loads of troops.

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Gains from geopolitical conflict were capped by worries about the slowing global economy as China released more disappointing economic data on Monday. The nation’s inflation was low at 1.6 percent and its producer price index was down 2.2 percent in October. The discouraging figures came on the heels of lackluster trade data out over the weekend, suggesting that the world’s second-largest oil consumer will continue to struggle in the fourth quarter.

The United States looked to be moving in the opposite direction as the nation’s non-farm payrolls data showed that the labor market was steadily improving. The report, though below expectations, marked the ninth consecutive month that U.S. employers added more than 200,000 new jobs, an encouraging sign for the nation’s economic recovery.