Oil prices eased in Asian trade on Tuesday, but losses were limited as Russia-Ukraine tensions showed no sign of abating, raising fears of a disruption to energy supplies to Western Europe.
New York's main contract, West Texas Intermediate for May delivery, dropped 72 cents to $103.33 and Brent North Sea crude for May eased 49 cents to $108.58 a barrel.
“Despite easing during Asian trading, oil prices maintained strong foothold at elevated levels,” Tan Chee Tat, investment analyst at Phillip Futures in Singapore, told AFP.
“In our opinion, the Ukraine crisis is likely to remain in a deadlock and should continue to render good support to benchmark crude prices in the near term,” he said.
US President Barack Obama urged his Russian counterpart Vladimir Putin in a telephone call to press pro-Moscow groups to lay down their arms in Ukraine after militias took over several government buildings in the country.
The United States and much of the West believes Russia is stoking a secession crisis in eastern Ukraine, charges the Kremlin has vehemently denied.
Since Moscow took control of Ukraine's Crimea peninsula last month, several mainly Russian-speaking eastern regions in the ex-Soviet state have seen calls for similar votes by pro-Kremlin groups.
Andrew Nerf, senior energy analyst with IHS Energy, said “there are fears that violence in eastern Ukraine could serve as a pretext for a Russian invasion and a repeat of the Crimea scenario”.
With Ukraine a key conduit for Russian gas to Western Europe, traders fear that any any full-scale armed conflict will disrupt supplies and send oil and gas prices skyrocketing.
Russian deliveries account for 34 percent of the natural gas supplies to the European Union, according to the Soufan Group, a US-based intelligence firm.
Oil prices are also supported by better-than-expected retail sales data in the US, analysts said.
The government reported US March retail sales jumped 1.1 percent, beating forecasts and raising hopes of resurgent demand in the world's top crude consumer. - Sapa-AFP