Oil prices seem more impacted by the slack Chinese manufacturing PMI then the upset in the Ukraine. Brent prices are lower, while WTI is experiencing some gains in what appears to be some spread trading unwinds. We have mentioned how the Ukraine situation cuts both ways, in terms of its effect on the price of oil. The damage to the euro zone economy is a decided negative, and the sanctions regime, as it evolves, will curtail economic activity within Russia and Europe. Of course, the flip-side is Russia’s supply of oil and refined products to Europe. The mere threat of using oil as a weapon will send prices surging higher, and the first phase of this conflict produced just that result.
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