Crude Oil Hits Monthly Low While Brent Oil Eases Up

Crude oil continued to ease this morning trading at 97.53 down by 10 cents following Monday’s fall as tensions in the Ukraine subsided and the vote in Crimea went off without a hitch. Oil prices fell modestly Monday as markets downplayed fears of disruptions to Western European energy supplies after Crimea voted in a disputed referendum to leave Ukraine and join Russia. Reports indicated that oil and gas continue follow through the Ukraine at normal levels.

Brent North Sea crude slid $1.97 to $106.24 a barrel in London trade, its lowest level since early February and recovered on Tuesday morning adding 26 cents to reach 106.51.

The European Union and the United States on Monday slapped sanctions on top Russians and Ukrainians deemed responsible for the breakaway vote on the Crimean peninsula that has fanned the worst East-West standoff since the Cold War. Crimea’s separatist authorities meanwhile moved against energy companies in their first nationalizations after deciding all Ukrainian state property would be transferred into Crimean ownership.

Libyan oil production had dropped again as the country struggles with rebels blockading eastern oil terminals since July, cutting exports from 1.5 million barrels a day to a trickle of 250,000.

On Monday US Navy SEALs captured an oil tanker that had loaded crude at a rebel-held port in eastern Libya and escaped to sea, at the request of both Libya and Cyprus. The naval commandos were taking it to a Libya port, the US Defense Department said, without identifying the destination.

Traders were awaiting the outcome of the Federal Reserve’s two-day policy meeting on Wednesday. The US central bank is expected to further cut its massive stimulus program amid a slowly recovering economy, the world’s largest crude-oil consumer.

Natural gas added 16 points to trade at 4.45411 ahead of this week’s inventory release as traders evaluated slight shifts in the near term weather forecast. A new winter storm named Nemo is beginning to grow and may threaten the US before the close of the month. US scientists said on Thursday they have devised a potentially easier, cheaper and cleaner way to turn natural gas into usable fuels and chemicals – a discovery which could lead to natural gas products displacing oil products in the future. The process would be less complex than conventional methods to turn natural gas into liquid products and it uses much lower heat and inexpensive materials to get the job done, they said. Almost anything – fuel or chemical – that can be made from petroleum also can be made from natural gas, but it is not done today because the cost of converting natural gas into those materials is much higher, the researchers said.