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Oil dips after ECB rate cuts, easing Ukraine concerns

Oil prices slipped after the European Central Bank cut interest rates, sparking volatility in the dollar and dollar-priced crude, and concerns about Russia-Ukraine tensions eased.

NEW YORK: Oil prices slipped on Thursday after the European Central Bank (ECB) cut interest rates, sparking volatility in the dollar and dollar-priced crude, and concerns about Russia-Ukraine tensions eased.

The US benchmark futures contract, West Texas Intermediate (WTI) for delivery in July, dipped 16 cents to close at $102.48 a barrel on the New York Mercantile Exchange.

European benchmark Brent North Sea crude for July settled at $108.79 in London, down 39 cents from Wednesday's closing level.

The dollar rose sharply against the euro but then fell quickly back after the ECB cut its key interest rates to new all-time lows as part of unprecedented measures to bolster fragile eurozone growth and prevent deflation.

The WTI price mapped the dollar's shift.

The WTI had a "very interesting day... going way down, and then way up," said Bart Melek of TD Securities. "Crude moved lower at the beginning of the day responding to the ECB announcement and the dollar moving higher."

A stronger greenback makes dollar-priced oil more expensive for buyers using weaker currencies.

"We wait for tomorrow's payroll numbers," Melek said, referring to the Labor Department's May jobs report, a key indicator of the health of the US economy.

Signs of easing Group of Seven tensions with Russia over the Ukraine crisis helped remove support for oil prices.

"Some market participants clearly decided to take profits when the G7 imposed no further sanctions against Russia at its meeting yesterday," Commerzbank said in a research note.

G7 leaders, holding a two-day summit in Brussels without Russian President Vladimir Putin, because Russia was expelled from the G8 grouping in March, urged Moscow to stop destabilizing Ukraine or face further sanctions.

Investors fear a full-blown conflict in the ex-Soviet state, a conduit for a quarter of European gas imports from Russia, will disrupt supplies and send energy prices soaring.

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