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Oil prices mixed; WTI drops on abundant US supplies

The US benchmark oil price fell for the first time in four trading sessions on Thursday amid near-record high US inventories, while Brent edged higher supported by the Ukraine crisis.

NEW YORK: The US benchmark oil price fell for the first time in four trading sessions on Thursday amid near-record high US inventories, while Brent edged higher supported by the Ukraine crisis.

The US benchmark, West Texas Intermediate (WTI) for delivery in June, dropped 87 cents to close at $101.50 a barrel.

In London, Brent North Sea crude for June advanced 25 cents to settle at $110.44 a barrel as the contract expired.

Investors in WTI focused on the overall bearish crude-oil number from Wednesday's Department of Energy oil inventories report, prompting selling, said Bob Yawger of Mizuho Securities.

"It appears that the market is very well-supplied," he said.

At 398.5 million barrels last week, US crude reserves are within striking range of their record-high of 399.4 million barrels in late April.

Yawger said that WTI also was getting pressure from a broad sell-off in US equities.

US economic indicators were mixed, with initial unemployment claims falling to a seven-year low last week but industrial output falling in April. Consumer inflation ticked higher but remained tame and well below the Federal Reserve's 2.0 per cent target.

Traders also digested eurozone economic output data for the first quarter that came in weaker than expected.

Investors sought shelter from riskier assets amid the ongoing Ukraine crisis.

Ukraine's interim leaders were battling on Thursday to keep the country stable ahead of the May 25 presidential election, pressing on with a military offensive to quell a bloody pro-Moscow insurgency in the eastern industrial heartland.

Ukraine is a vital conduit for Russian oil and gas exports to Europe, and any escalation of the conflict could severely disrupt supplies and send prices soaring, analysts say.

The market shrugged off a modest upgrade to 2014 oil demand growth from the International Energy Agency.

The IEA raised its 2014 forecast by 65,000 barrels per day to 92.8 million barrels, largely because of unexpectedly strong demand in the first quarter, driven by consumption in the US.

"No big surprises from the IEA today with the focus still on Ukraine amid elevated risk premium," VTB Capital analyst Andrey Kryuchenkov told AFP.

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