WTI fell USD 1.59 in New York yesterday after Russian President Vladimir Putin declared in a news conference there was currently "no need" to send troops into Ukraine. European benchmark Brent tumbled USD 1.90 in London. Breaking a week of silence after the ousting of Ukraine president Viktor Yanukovych, Putin denied that he had sent Russian troops to the Crimean peninsula and said the uniformed men present there were "local forces of self-defence".
Western leaders as well Ukraine's interim government however insist that the troops are backed by the Kremlin. "With Russia stationing their troops in Crimea... these should keep tensions high up in Ukraine and should give crude oil some support," Tan Chee Tat, investment analyst at Singapore-based Phillip Futures, told AFP. Tan said prices also gained support after Russia carried out a successful test launch of an "advanced" intercontinental ballistic missile yesterday. A US defence official said the US was informed of the test earlier this week.
The standoff between Moscow and the West over Ukraine has been the main focus of oil investors this week as more than 70 per cent of Russia's oil exports to Europe pass through the ex-Soviet state. Russia, which produced 10 million barrels a day in January, vies with Saudi Arabia as the world's largest oil producer, and is the second-largest producer of natural gas. Elsewhere, analysts said markets are digesting the Chinese government's annual economic growth target of around 7.5 percent this year while also awaiting the latest US stockpile figures for clues about energy demand in the world's biggest economy. The US Department of Energy will release its official petroleum stockpiles report later today.