West Texas Intermediate and Brent oil rose after the US and European Union added to sanctions against Russia over the Ukraine crisis. WTI climbed as much as 1.3 percent.
The US put seven more people on its sanctions list this week, including the head of OAO Rosneft, the state-run Russian oil company.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI, fell in 11 of the 12 weeks ended April 18, according to the Energy Information Administration.
“We’re up on two factors today, the continuing crisis in Ukraine and speculation about the U.S. storage numbers,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “The focus of the market switches from the Cushing number to the national total. Cushing supplies are at the lowest level since 2009 already while total US supply is approaching a massive 400 million barrels.”
WTI for June delivery advanced $1.11, or 1.1 percent, to $101.95 a barrel at 9:58am on the New York Mercantile Exchange. Trading was 5.3 percent above the 100-day average for the time of day.
Brent for June settlement climbed $1.02, or 0.9 percent, to $109.14 a barrel on the London-based ICE Futures Europe exchange. Trading was 2.7 percent above average. The European benchmark traded at a $7.19 premium to WTI, compared with $7.28 yesterday.
“The initial reaction to the added sanctions was that they were too weak to make much of an impact, but there’s a reappraisal taking place,” Yawger said. “They may be tightened and the situation in Ukraine continues to get worse.”
US crude supplies climbed 3.52 million barrels in the week ended April 18, to 397.7 million in the week, the EIA reported April 23. It was the highest stockpile level in EIA weekly data that began in 1982, and the most since 1931 in monthly government figures going back to 1920.
Crude inventories at Cushing declined 788,000 barrels in the same period to 26 million, the lowest level since October 2009. Supplies at the storage hub have tumbled since the southern portion of the Keystone XL pipeline began moving crude in January to the Texas Gulf Coast from Cushing.
