The price of oil rose to a five-week high Wednesday amid unrest in eastern Ukraine, even as a report showed a large rise in United States crude oil supplies, according to Reuters.
Benchmark U.S. crude oil for May delivery gained $1.04 to close at $103.60 on the New York Mercantile Exchange, Reuters reported. The contract gained $2.12 on Tuesday and it last closed above $103 on March 4.
U.S. Secretary of State John Kerry accused Russian agents and special forces of stirring separatist unrest in eastern Ukraine, though unrest in the region won't directly impact global oil supplies and trade, according to Reuters.
The overall risk premiums which are rising are making investors worry that simmering tensions between world powers and Russia could quickly take a turn for the worse, Reuters reported.
"Tensions between the West and Russia could lead to unexpected consequences and that's what the market is worried about," said Victor Shum, vice-president of energy consultancy IHS Energy Insight, according to Reuters. "But prices are overheated at this point and I do see them on an easing trend, but only moderately."
Brent crude, used to set prices for international oil varieties, rose 31 cents to $107.98, Reuters reported. Traders are worried about the potential for disruption of supplies due to instability in eastern Ukraine and more sanctions on Russia, a crucial supplier of oil and natural gas to Europe, Reuters reported.
Pro-Russian separatists have seized government buildings in several cities in Ukraine's industrial east in the aftermath of Russia's annexation of Crimea, according to Reuters.
The Energy Department's Energy Information Administration reported that oil rose despite a report of surging U.S. crude supplies, Reuters reported.
The department also reported oil supplies rising by 4 million barrels last week, according to Reuters.
