SINGAPORE: Oil prices edged higher in Asian trade on Friday on escalating fears of a full-blown armed conflict in Ukraine as pro-Moscow rebels press on with disputed independence referendums.
The US benchmark, West Texas Intermediate for June delivery, was up 11 cents to $100.37 in afternoon trade, while Brent North Sea crude for June gained one cent to $108.05 per barrel.
Despite a call from Russian President Vladimir Putin to postpone the vote to ease tensions, pro-Kremlin rebels in Ukraine vowed Thursday that independence referendums would go ahead as planned on May 11.
There are fears the country could erupt in fresh violence Friday when both it and Russia celebrate the Soviet victory in World War II.
“We expect political turmoil in Ukraine to continue in the run-up to, and probably also in the aftermath of, the presidential elections on May 25,” Dutch bank ABN AMRO said in a note.
Desmond Chua, market analyst at CMC Markets in Singapore, said there would be a “build-up in risk premium” ahead of the planned May 11 referendums in eastern Ukraine.
Analysts said energy investors were also jittery after Russia on Thursday ordered Ukraine to pay upfront for all its future natural gas deliveries because of billions of dollars in outstanding debts.
The largely anticipated announcement imperils supplies to a large swathe of the European Union because nearly 15 percent of all Russian gas consumed by the 28-nation bloc transits through Ukraine.
A full-blown armed conflict in the ex-Soviet state could disrupt supplies and send energy prices rocketing.
Washington and its European allies supporting Ukraine’s Western-friendly government have accused Russia of fomenting unrest in the country’s east, but Moscow has denied the allegations and says it is the US that is running the show there.