Crude prices drift lower after Crimea referendum

Oil slipped lower Monday as the United States hinted at fresh sanctions against Moscow after Crimea voted in a disputed referendum to leave Ukraine and join Russia. New York's main contract, West Texas Intermediate for delivery in April, fell 24 cents to $98.65 a barrel compared with Friday's close. Brent North Sea crude for May delivery slid 57 cents to stand at $107.64 around midday in London. Washington strongly rejected the vote on Sunday, saying it violated Ukraine's constitution and was carried out "under duress of Russian military intervention." "The oil market still looks very comfortable even after the referendum in the Crimea," said Commerzbank analyst Carsten Fritsch. Crimea was due to formally apply to join Russia on Monday after voting to split from Ukraine, as Europe prepared to hit Moscow with a wave of sanctions in the worst East-West stand-off since the Cold War. An overwhelming 96.6 percent of voters on the mostly Russian-speaking peninsula chose to secede from Ukraine, according to final results from Sunday's referendum, which the Kremlin is accused of orchestrating. There was international condemnation of the referendum, with the European Union saying it was "illegal and illegitimate" and the outcome would not be recognised. Investors are worried that potential sanctions against Russia could disrupt gas and oil supplies from the country. More than 70 percent of Russia's gas and oil exports to Europe pass through Ukraine. "The West is refusing to recognise the result of the referendum ... and plans to discuss further sanctions against Russia over the next few days," added Fritsch. "Clearly nobody expects the oil and gas sectors to be affected, as the negative economic consequences would simply be too serious for both sides. "After all, roughly a third of the EU's oil and gas imports come from Russia –- in Germany the proportion is even somewhat higher." The Crimean referendum would mark the most radical redrawing of the map of Europe since Kosovo's 2008 declaration of independence from Serbia. Traders are also keeping an eye on the Federal Reserve's next policy meeting on Tuesday and Wednesday. The US central bank is expected to further cut its economic stimulus programme as the economy shows further signs of recovery. The health of the US economy is a key influence on oil prices as the United States is the world's biggest oil consuming nation.