Oil stays below $100 as Ukraine tensions fester
- Article by: PABLO GORONDI
- Associated Press
- May 6, 2014 - 7:35 AM
The price of oil held below $100 a barrel amid concern over clashes between pro-Russian insurgents and Ukrainian government troops and expectations of another rise in U.S. crude stockpiles.
By early afternoon in Europe, benchmark U.S. crude for June delivery was down 2 cents to $99.46 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, the contract fell 28 cents, reflecting the possibility of weaker demand due to lackluster Chinese manufacturing.
Brent crude, a benchmark for international varieties of oil, was up 14 cents to $107.86 on the ICE Futures exchange in London.
Markets have seesawed as concern over the possible impact of tensions in Ukraine on energy supplies competes with data suggesting growth in China, the world's second-largest economy, is cooling. Further violence in Ukraine's east, where militants are agitating for closer ties with Russia, could result in tougher Western sanctions against Russia, a major oil and gas producer.
In Ukraine, the interior minister said Tuesday that 32 pro-Russian insurgents had been killed in fighting in and near the city of Slovyansk as the national government tries to reassert control over the region, while four government troops were killed and 20 injured.
Meanwhile, new figures expected to show a rise in U.S. stockpiles of crude kept prices in check.
Data for the week ending May 2 is expected to show a build of 1.3 million barrels in crude oil stocks and a draw of 900,000 barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department's Energy Information Administration — the market benchmark — will be out on Wednesday.
Last week's data showed crude stocks at 399.36 million barrels, the highest on record.
Oil prices were also under pressure from speculation that agreements between the Libyan government and militias controlling export terminals soon could increase the country's oil sales from their current level of around 225,000 barrels a day. A year ago, Libya was exporting some 1.4 million barrels a day, mostly to refineries in Europe.
In other energy futures trading on Nymex:
— Wholesale gasoline was up 1.02 cents at $2.9194 a gallon.
— Heating oil added 0.74 cent to $2.9138 a gallon
— Natural gas gained 3.7 cents to $4.725 per 1,000 cubic feet.
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