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 The United States and NATO have voiced alarm over what they say are
thousands of Russian troops massed near its western border with
Ukraine. Russian President Vladimir Putin has reserved the right to
send troops into Ukraine, home to a large population of
Russian-speakers in the east.
U.S. crude oil rose for its third session on data showing consumer
spending increased in February, lifted by an increase in services
consumption, news that also buoyed the U.S. equities markets for
most of the session. However, a dip in consumer sentiment this month
offered confirmation that economic growth slowed in the first
quarter.
Brent rose 24 cents to settle at $108.07 a barrel. U.S. crude gained
39 cents a barrel to settle at $101.67, after gaining more than $1
in each of the past two sessions.
The U.S. benchmark has been boosted by a continued drawdown in oil
stocks at Cushing, Oklahoma, the pricing point for the U.S.
benchmark.
"I think that some of the same factors that have pushed us back
above $100 are still driving the market, and there's still increased
geopolitical risk from the situation in the Crimea as Russia
continues to put troops along the border with Ukraine," said Gene
McGillian, an analyst with Tradition Energy in Stamford,
Connecticut.
U.S. crude finished the week up 2.1 percent. Brent crude has gained
nearly 1.1 percent on the week, after four consecutive weeks of
losses as it retreated from February's gains on rising tensions in
Ukraine.
U.S. crude's gains also outpaced Brent's for a third session,
narrowing its discount to Brent <CL-LCO1=R> to end the session at
$6.40, in from as wide as $8.03 on Wednesday.
Analysts said strong crude oil production in the U.S. was balancing
out the risks of curbed supplies from Russia, the largest oil
producer in the world.
"I do think the geopolitical risk play is there, but with the strong
stock market and the abundant U.S. supplies, the market is being
anchored somewhat from taking off," said Phil Flynn, an analyst for
the Price Futures Group in Chicago, Illinois.
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SUPPLY WORRIES UNDERPIN
Oil prices also continued to draw support from the Ukraine crisis,
with the United States and the European Union agreeing to work
together to prepare tougher economic sanctions in response to
Russia's behaviour in Ukraine and to make Europe less dependent on
Russian gas.
"Possible intensifying of sanctions led to higher perceived
geopolitical risks by markets, hence supporting gains in benchmark
crudes," Phillip Futures said in a note.
Other supply worries also underpinned prices.
In Libya, protesters have blocked a pipeline carrying around 30,000
barrels per day (bpd) of oil condensate from the southwestern al-Wafa
oilfield to the Mellitah export port, state-owned National Oil Corp
(NOC) said on Thursday.
NOC this week said Libya's output stood at 155,000 bpd, after the
130,000-bpd El Feel field, co-operated by Eni, had stopped
producing. The 340,000-bpd El Sharara field shut weeks ago.
Libya's exports have been well below its capacity of around 1.25
million bpd since July 2013, when militias and protesters began
blocking its major oil export terminals and oilfields.
Money managers cut their net long U.S. crude futures and options
positions in the week to March 25, the U.S. Commodity Futures
Trading Commission (CFTC) said.
The speculator group cut its combined futures and options position
in New York and London by 10,399 contracts to 340,970 during the
period.
(Additional reporting by Peg Mackey in London, Jacob Gronholt-Pedersen;
editing by William Hardy, Dale Hudson, David Gregorio and Marguerita
Choy)
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