Crude Oil Ends Higher On Geopolitical Concerns

(RTTNews) - U.S. crude oil snapped a five-day loss to end higher Monday, on renewed geopolitical concerns after news reports indicated militants in Iraq to have taken control of the country's biggest dam, some important oil fields, and three towns as well.

With no major economic data release for the day, investors continued to monitor the developments in Libya, Ukraine and the Middle East for cues.

With violence continuing unabated in Iraq and Libya, supply concerns emerged with worries that the two countries may not be able to ship the quantities previously envisaged. According to reports, the situation remains tense in Libya where militants damaged Tripoli's main oil depot. The fire has reportedly spread to several other tanks, raising fears of an environmental disaster.

News that Russia will be holding military exercises near the Ukraine border this week and reports that militant Sunni insurgents have seized Iraq's biggest hydroelectric dam - Mosul Dam, as well as oilfields, supported oil prices.

Meanwhile, a seven-hour humanitarian ceasefire declared earlier today in parts of Gaza has ended, reigniting fears of more fighting to follow.

Light Sweet Crude Oil futures for September delivery, the most actively traded contract, gained $0.41 or 0.4 percent to close at $98.29 a barrel on the New York Mercantile Exchange Monday.

Crude prices for September delivery scaled a high of $98.44 a barrel intraday and a low of $97.43.

On Friday, crude oil futures slipped to end lower for a fifth straight session, on demand growth concerns. Crude oil shed over 3 percent last week.

The U.S. economic calendar is relatively light this week, with the ISM services and factory orders data due on Tuesday before reports on trade balance and weekly jobless claims due out later in the week.

On Thursday, the European Central Bank, which provided additional stimulus last month, will announce its policy decision.

Meanwhile, Portugal's central bank unveiled a plan to rescue one of the country's largest lenders, Banco Espirito Santo, late Sunday after it reported a record EUR 3.6 billion first-half loss. The plan provides the general activity and assets of the troubled BES to be transferred immediately to a new company called Novo Banco.

The equity capital of Novo Banco, to the amount of EUR 4.9 billion, will be fully underwritten by the Resolution Fund set up by Portugal in 2012. The loan granted by the State to the Resolution Fund will be temporary and replaceable by loans granted by credit institutions. The funding of treasury will be repaid eventually by the sale of the new institution and this will safeguard public money, the finance ministry said.