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Oil prices go down in Asian trade, but retain support amid Ukraine tensions

SINGAPORE--Oil prices eased in Asian trade Monday, but retained support from the latest round of tensions between Ukraine and Russia that sparked concerns of a full-scale military conflict, analysts said.

U.S. benchmark West Texas Intermediate for September delivery was down 62 cents at US$96.73 while Brent crude for October fell 92 cents to US$102.61 in afternoon trade.

Desmond Chua, market analyst at CMC Markets in Singapore said oil prices were supported by news on Friday that Ukraine had shelled Russian armored vehicles after they entered its territory. Moscow denied the incursion.

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.

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