West Texas Intermediate crude declined further after falling the most in two months; while Brent slipped on speculation the dispute in Ukraine poses little risk to oil supplies.
Futures slipped 0.5 percent in New York; having lost 1.5 percent after President Vladimir Putin said he sees no immediate need to invade eastern Ukraine, while the Obama administration threatened sanctions.
U.S. crude inventories rose by 1.17 million barrels last week, the American Petroleum Institute reported.
“The market is betting on a sort of diplomatic solution” in Ukraine, Hannes Loacker, an analyst at Raiffeisen Bank International AG in Vienna, said. “There should be no significant supply disruptions, as Ukraine is not a significant oil producer and the amount of Russian oil exported via Ukraine is small.”
WTI for April delivery dropped as much as 52 cents to $102.81 a barrel in electronic trading on the New York Mercantile Exchange and was at $103.02 as of 12:36 p.m. London time. The volume of all futures traded was 6 percent below the 100-day average.
Brent for April settlement slid as much as 86 cents to $108.44 a barrel on the ICE Futures Europe exchange. The European crude was at a premium of $5.65 to WTI on ICE, narrowing for a seventh day in the longest run of contractions since November 2011.
WTI advanced 5.2 percent last month as freezing weather boosted demand for heating fuels and crude supplies at the U.S. storage hub in Cushing, Oklahoma, shrank with the opening of a new pipeline.
Stockpiles at Cushing, the delivery point for Nymex futures, declined by 2.63 million barrels in the week ended Feb. 28, the industry-funded API reported.
Distillate inventories, including heating oil and diesel, fell by 270,000 barrels, the API said. Supplies probably dropped by 1 million, according to the median estimate of nine analysts surveyed by Bloomberg before data from the Energy Information Administration, the Energy Department’s statistical arm.
About 313,000 barrels of crude a day transited via Ukraine in 2013, according to the country’s Energy Ministry.
