April 23 (Bloomberg) -- West Texas Intermediate crude traded above $102 on concern the clash over Ukraine between the West and Russia may intensify. Brent neared $109.
WTI ranged from $101.20 to $102.08 after falling to a two-week low yesterday. Ukraine edged closer to a new round of hostilities after the government in Kiev said it’s resuming operations to oust militants from eastern cities and Russia pledged to defend its citizens in the neighboring country. U.S. crude supplies rose last week for the 13th time in 14 weeks, a Bloomberg News survey showed before a government report today.
“The market is trying to balance the risk in Ukraine and the possibility that we are going to see another increase in inventories,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “It’s hard to get too excited about WTI when you have so much oil in storage.”
WTI for June delivery increased 7 cents to $101.82 a barrel on the New York Mercantile Exchange at 9:29 a.m. The May futures expired yesterday at $102.13, the lowest close for a front-month contract since April 7. Trading was 16 percent above the 100-day average for the time of day.
Brent for June settlement gained 14 cents to $109.41 a barrel on the London-based ICE Futures Europe exchange. Volume was 22 percent below the 100-day average. The European benchmark crude’s premium to WTI expanded to $7.59 a barrel from $7.52 yesterday.
Russian Foreign Minister Sergei Lavrov said his country is prepared to retaliate if its “legitimate interests” are “attacked directly,” drawing a parallel with its actions during a 2008 war over the Georgian breakaway region of South Ossetia.
A military operation is under way after its suspension for the Easter holiday, with security agencies seeking to eliminate all militias operating in Kramatorsk, Slovyansk and other cities, Ukraine’s First Deputy Prime Minister Vitali Yarema told reporters in Kiev today.
U.S. crude inventories probably grew by 3 million barrels in the week ended April 18, according to the Bloomberg survey before today’s report from the Energy Information Administration, the Energy Department’s statistical arm. Supplies increased by 519,000 barrels, the American Petroleum Institute reported yesterday.
The API said supplies at Cushing, Oklahoma, the delivery point for WTI futures, decreased 781,000 barrels. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA.
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