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The global events that have transpired have gone a long way to dictating the direction in the Brent crude price over the last couple of months. Russia’s actions in annexing Crimea and the widespread suspicions of its involvement in conflicts inside Ukraine have seen the US hold an outwardly critical stance. Developments lead to the US sending one of its warships to the Black Sea. Consequently, the Russian air force carried out a number of closer-than-normal passes near the warship. The verbal jousting that Russia and the US have been conducting has subsequently escalated.
The recent weeks have seen Libya take a number of steps towards increasing its oil exports now that an agreement has been reached over access to its sea terminals. This extra supply has not quite come on tap but is close. The Organisation of the Petroleum Exporting Countries, for its part, still has an excess of supply that it can offer to the markets, with Saudi Arabia able to add an additional 2.7 million barrels a day should they need it.
Fear rather than supply is likely to drive this price and as such, a close above the $109 level is the first hurdle that crude needs to clear before ultimately looking to beat the $111.42 high for 2014.