oil falls as Ukraine, Russia seek to end violence
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[April 18, 2014]
LOS ANGELES (Reuters) — Brent
crude oil fell on Thursday, stalling below $100 a barrel after the
United States, Russia, Ukraine and the European Union jointly called
for an end to the violence in Ukraine, taking some risk premium out
of the market, while U.S. oil rose on positive economic data.
A statement from the four parties meeting in Geneva sought an
immediate halt to violence in Ukraine, where Western powers believe
Russia is fomenting a pro-Russian separatist movement.
Brent crude for June delivery, which has received support in recent
days as violence in Ukraine escalated, settled down 7 cents at
$109.53 a barrel, after earlier hitting a high of $110.19 ahead of
the joint statement.
While the United States and European Union have stopped short of
imposing sanctions on Russia's oil and gas exports, tensions between
them and the world's second-largest crude exporter have put energy
markets on edge.
"The rhetoric about the Ukraine has been ratcheted down and that
fear play in oil markets is coming down with it," said Phil Flynn,
analyst at Price Futures Group in Chicago. "Instead, today we are
talking about economic data."
U.S. prices found support from strong U.S. employment data, which
showed new applications for unemployment benefits close to a
6-1/2-year low, the latest sign the economy of the world's largest
oil consumer is gaining momentum.
U.S. oil for delivery in May settled up 54 cents at $104.30 a
barrel, after earlier hitting a high of $104.78 a barrel. The
contract had touched a six-week high of $104.99 in the previous
session, though a report showing a large build in stockpiles weighed
on sentiment on Wednesday.
With Russian troops massed on the border with Ukraine and three
separatists killed overnight in eastern Ukraine, the prospects of
defusing the crisis at the Geneva talks had appeared slim, which
boosted oil prices.
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Russian President Vladimir Putin accused Ukraine's leaders on
Thursday of committing a "grave crime" by using the army to try to
quell unrest in the east of the country and did not rule out sending
in Russian troops.
But addressing Russians in his annual televised phone-in, Putin said
he hoped he would not need to take such a step and that diplomacy
could succeed in resolving the standoff.
Also pressuring crude was a stronger dollar against the yen and the
euro, as traders bought dollars after the joint statement on
A softer dollar had earlier supported gains in dollar-priced
commodities after U.S. Federal Reserve Chair Janet Yellen stressed
the need for accommodative monetary policy, citing persistently low
inflation and economic slack.
(Reporting by Edward McAllister in Los Angeles, David Sheppard in
London, Manolo Serapio Jr. and Florence Tan in Singapore; editing by
Louise Ireland, Jane Baird, Chris Reese, Peter Galloway and Marguerita Choy)
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