U.S. Secretary of State John Kerry and his Russian counterpart,
Sergei Lavrov, discussed ways to defuse the Ukraine crisis during
talks in Paris on Sunday, in which Kerry made clear Washington still
considered Russian actions in Crimea "illegal and illegitimate."
Brent crude for May was at $107.84 a barrel by 0214 GMT, down 23
cents from Friday's settlement, the highest since March 14. U.S.
crude for May delivery edged down 25 cents to $101.42 a barrel after
settling at the highest since March 7.
"Rising oil supply doesn't seem to be having a negative impact as
people are prepared to buy on dips, mainly because of the Crimea
crisis," Ben Le Brun, a markets analyst at OptionsXpress in Sydney
said. "There is still an element of a risk premium."
The West was considering more sanctions on Russia's vital industries
including its oil and gas sector after the annexation of Crimea,
while military manoeuvres kept investors on edge. Rising crude
production from the United States and Iraq has capped price gains.
Front-month Brent is set to post its first quarterly decline in
three quarters, down about 2.5 percent as rising supply from Iraq
and increased exports from Iran have kept the market well supplied,
offsetting disruptions in Africa.
Iraq has started production at the giant West Qurna-2 field, moving
closer to its output target of 4 million barrels per day (bpd) this
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Oil condensate flows from Libya's Wafa field to the western Mellitah
port are still blocked, state-run National Oil Corp (NOC) said.
Nigerian crude exports are set to fall to their lowest since 2009
due to a production outage for the Forcados grade.
Brent traditionally trades at a premium to WTI, and OptionsXpress'
Le Brun said the Crimea crisis should have widened the premium.
Instead, front-month West Texas Intermediate prices are set for a 3
percent gain in the first quarter as new pipeline capacity drained
oil from bloated inventories at the contract's delivery point in
U.S. crude oil exports that hit a 15-year high in January also
helped eased a supply glut caused by booming shale oil output
although exports remained severely limited by law.
(Reporting by Florence Tan; editing by Richard Pullin)
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