24/04/2014 08:32 AST
West Texas Intermediate traded near a two-week low as crude inventories increased to the highest level in 83 years in the U.S., the world’s biggest oil consumer. Brent was steady in London.
Futures were little changed in New York after two days of losses. Crude stockpiles expanded by 3.52 million barrels to 397.7 million last week, the Energy Information Administration reported yesterday. Russian Foreign Minister Sergei Lavrov said his country would defend its citizens in Ukraine as a truce faltered, while the U.S. prepared to send hundreds of troops for exercises in four nations bordering Russia.
“Ukraine will continue to be a factor in market thinking on oil,” said Ric Spooner, a chief strategist at CMC Markets in Sydney who predicts investors may buy West Texas contracts if prices decline to $100.80 a barrel. Crude supplies have risen to “an uncomfortably high base to go into the driving season with,” he said.
WTI for June delivery was at $101.69 a barrel in electronic trading on the New York Mercantile Exchange, up 25 cents, at 1:51 p.m. Seoul time. The contract fell 31 cents yesterday to $101.44, the lowest close since April 7. The volume of all futures traded was about 53 percent below the 100-day average. Prices have gained 3.3 percent this year.
Brent for June settlement was 19 cents higher at $109.30 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $7.61 to WTI. The spread widened for a third day yesterday to close at $7.67.
Cushing Supplies
U.S. crude inventories have risen to the most since May 1931, according to monthly government data going back to 1920. Reports before 1976 were based on Bureau of Mines figures, according to the EIA, the Energy Department’s statistical arm. Alaskan crude in transit was included from 1981.
Stockpiles at Cushing, Oklahoma, the delivery point for the WTI contract, dropped by 788,000 barrels to 26 million, the EIA said. That’s the lowest level since October 2009. Supplies at the storage hub, the largest in the U.S., have decreased since January when the southern leg of the Keystone XL pipeline began moving oil to the Gulf of Mexico.
Crude inventories along the Gulf Coast, known as PADD 3, climbed by 2.44 million barrels to 209.6 million, the highest in EIA data going back to 1990.
In Ukraine, the government resumed an offensive against separatists in eastern cities, prompting Russia to call the move a crime. Operations to clear militants from Kramatorsk, Slovyansk and other cities were under way yesterday, First Deputy Prime Minister Vitali Yarema said.
Russia is the world’s biggest energy exporter. Escalating tension with Ukraine risk derailing an accord to disarm rebels signed last week in Geneva by both governments, the U.S. and the European Union.
Bloomberg
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