Front-month Brent crude futures held on to gains ahead of the contract expiration on Thursday, while US futures fell even as concerns about the crisis in Ukraine and a tightening global oil market kept prices near 2-1/2-week highs. News of returning Libya supply pressured oil. The Opec-member country's output was at 300,000 barrels per day (bpd) with the El Feel field at full capacity and Wafa field back at work after protests ended, an official with the National Oil Corporation (NOC) said.
Royal Dutch Shell said it has lifted force majeure on exports of Forcados crude from Nigeria, adding pressure on oil. Expiring Brent crude for June was up 8 cents at $110.27 a barrel by 12:37 pm EDT. Wednesday's close at $110.19 was the highest settlement since April 24. Brent July was down 31 cents at $109 a barrel. US June crude was down 90 cents at $101.47 a barrel after Wednesday's settlement at $102.37 a barrel, its highest finish since April 21. The June contract expires Tuesday.
US RBOB gasoline and heating oil futures also fell on Thursday, after three consecutive higher settlements. "Brent has more risk from the geopolitical factors and this week's inventory data showed ample supply in the US even with stocks down in Cushing (Oklahoma)," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut. Crude oil stocks at the Cushing hub, delivery point for the New York Mercantile Exchange's (NYMEX) US crude contract, fell 592,000 barrels in the week to May 9, the US Energy Information Administration's (EIA) data released on Wednesday showed.
But total US crude inventories rose 947,000 barrels to 398.5 million barrels, as domestic production hit a 28-year high of 8.43 million barrels, the EIA said. The exclusion this week of pro-Moscow separatists from talks amongst Ukraine's interim leaders on plans to give the eastern regions greater autonomy cast doubt over moves to defuse the political crisis in Central Europe.
Russian and European Union energy ministers are to meet May 19 to set a date for more talks with Ukraine to end a dispute over gas prices and avoid a potential interruption of energy supplies. Also highlighting supply worries, Opec oil producers will need to raise output in the second half of 2014 to meet global demand as China builds its strategic reserves and stocks in industrialised countries remain low, the International Energy Agency (IEA) said on Thursday.
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