UPDATE 11-Oil surges to five-month highs on Ukraine tension
* Russia strengthens control over Crimea, calls U.N. meeting * Investors sell risky assets, buy oil * U.S. manufacturing growth rebounds from 8-month low (Updates with settlement prices, analysts commentary) By Elizabeth Dilts NEW YORK, March 3 (Reuters) - Crude prices rose more than $2 a barrel on Monday to the highest level since September as tensions over Russian military intervention on the Crimean peninsula rattled oil markets. President Vladimir Putin's forces tightened their grip on the Crimea region of Ukraine on Monday. Ukraine said Russia was massing armored vehicles there after Putin declared over the weekend that he had the right to invade his neighbor to protect Russian interests and citizens. Ukraine said Russia deployed 16,000 new troops to Crimea since last week. Russia is one of the world's biggest oil producers, and while analysts said it was unlikely Russian oil supplies would be disrupted by the Ukraine crisis, investors dumped riskier assets like stocks in favor of commodities like gold and oil. The growing tensions sparked a stock plunge in Moscow. The Moscow bourse slumped 11 percent and wiped out nearly $60 billion of value off Russian companies. U.S. crude settled $2.33 higher at $104.92 a barrel, its highest settlement price in 5-1/2 months. Earlier in the session, U.S. oil climbed as high as $105.22 a barrel. Brent crude settled $2.13 higher at $111.20 per barrel, after earlier spiking $3.32 to $112.39 per barrel, its highest intra-session peak since Dec. 30. The rise in U.S. oil lifted oil products. New York ultra-low sulfur diesel, commonly known as heating oil, rose more than 6 cents to settle at $3.0805. U.S. gasoline RBOB rose more than 4 cents to settle at $3.0203 per gallon. "There was a risk-off trade across markets except for commodities like oil where there is the biggest potential to see a supply crunch," Matt Smith, analyst at energy-consulting firm Schneider Electric. Former Ukrainian president Viktor Yanukovich, a Russian ally, fled the country on Feb. 21 after three months of street protests against his rule. Ukraine began mobilizing troops in the region over the weekend, alleging Russia's military intervention constituted a "declaration of war." Russian naval officials dispelled a report on Monday from the news agency Interfax that said Russian naval officials had ordered Ukrainian troops in Crimea to surrender by Tuesday or face a military assault, calling it "complete nonsense." The market briefly rose on the news. A leader in the Russian Parliament said on Monday that "for now, there is no need" to send armed Russian forces into Ukraine. Brent gained additional momentum on Monday after it pushed higher past a key technical point at $111.85 a barrel. That price marked a 61.8 percent Fibonacci retracement of a previous price fall. U.S. factory activity rebounded from an eight-month low in February and consumer spending rose more than expected in January, supporting U.S. oil. A stronger U.S. dollar capped gains in U.S. oil and commodities priced in the dollar. Russia produces about 10.4 million barrels of oil per day, and exports about 5.5 million barrels of crude oil per day. Piped gas exports beyond the former Soviet Union totalled 15.8 billion cubic meters in January, U.S. government data showed. The stand-off in Crimea raised concerns over disruptions of Russian natural gas supplies to Europe, which would lead to a rise in demand for alternative fuels such as heating oil. The European Union gets roughly a quarter of its gas supply from Russia, about half of which is piped through Ukraine. A relatively mild winter in Europe has reduced demand for heating fuel, however, and stockpiles stand about 20 percent above last year's level at the main European gas hubs. (Additional reporting by Christopher Johnson in London and Jacob Gronholt-Pedersen in Singapore; Editing by Dale Hudson, Jason Neely and Sofina Mirza-Reid and Diane Craft)
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