Tokyo - Oil prices eased in Asian trade on Monday, but retained support from the latest round of tensions between Ukraine and Russia which sparked concerns of a full-scale military conflict, analysts said.
The US benchmark, West Texas Intermediate for September delivery, was down 46 cents at $96.89 while Brent crude for October fell 65 cents to $102.88 in mid-morning trade.
Desmond Chua, market analyst at CMC Markets in Singapore said oil prices were supported by news on Friday that Ukraine had shelled Russian armoured vehicles after they entered its territory. Moscow denied the incursion.
Ukrainian President Petro Poroshenko said government artillery had destroyed “a considerable part” of a Russian military convoy purportedly carrying humanitarian aid into rebel-held east Ukraine.
The West and Kiev fear the convoy could be a “Trojan horse” to help the pro-Kremlin rebels, or provide Moscow with an excuse to send in the 20 000 troops that Nato says it has massed on the border.
The foreign ministers of Ukraine, Russia, Germany and France are locked in talks in Berlin to defuse the tense situation. Hosts Germany said late Sunday the “difficult” talks ended with no concrete advances but with “some progress”.
Investors fear a full-blown military conflict between Russia and Ukraine will disrupt Russian energy exports to Europe.
Russia is the world's second largest oil producer, while Ukraine is a major conduit of Russian gas exports to western Europe.
Oil prices have seen a build in risk premium after Russia seized Crimea in March and voiced support for the separatists in east Ukraine. Armed insurgencies in crude producers Libya and Iraq have also contributed to the price surge.