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 Western sanctions imposed on Monday against Russia over its
annexation of Ukraine's Crimea targeted individuals accused of
involvement and not broad trade.
Washington and Brussels said further sanctions would follow. On a
trip to Japan, Igor Sechin, CEO of Russian oil major Rosneft and
close ally of Putin, said expanding sanctions would only aggravate
the crisis.
Brent settled 94 cents lower at $105.85 per barrel after falling by
$1.08 to an intra-day low of $105.71 per barrel, the lowest since
Feb. 5.
"There is weakness in Brent because it doesn't appear that anything
immediate is going to happen in Ukraine," said Joseph Posillico,
senior vice president at Jefferies Bache in New York.
U.S. crude oil stockpiles soared nearly 6 million barrels last week,
more than double forecasts, as refinery utilization fell during a
time of low seasonal demand, U.S. Energy Information Administration
data showed.
U.S. crude futures rose in spite of the build as a 989,000-barrel
draw at the Cushing, Oklahoma, oil hub lent support. As well, the
April contract expires Thursday, spurring some investors to cover
short positions.
U.S. crude for April delivery rose 67 cents to settle at $100.37 per
barrel. U.S. crude for May delivery, which will become the
front-month contract on Friday, rose 29 cents to settle at $99.17
per barrel.
"(For U.S. oil) the Cushing stock draw is giving strength to the
calendar spreads, and that's providing support," Posillico said.
Brent's premium over U.S. crude <CL-LCO1=R> settled $1.23 tighter at
$6.68 per barrel, its narrowest settlement since March 7.
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The operator of the Seaway pipeline, which takes crude from Cushing
to the U.S. Gulf Coast, said the conduit would be ready to double
shipments as soon as late May, earlier than some analysts had
expected.
This will drain stockpiles at Cushing and lend support to U.S. crude
prices, analysts say.
The Federal Reserve further trimmed its bond-buying stimulus to $55
billion a month and dropped the U.S. unemployment rate as its
definitive yardstick for gauging the economy's strength, making it
clear it would rely on a wide range of measures in deciding when to
raise interest rates.
(Additional reporting by Robert Gibbons in New York, Alex Lawler in
London, and Jacob Pedersen in Singapore; editing by Dale Hudson,
Jane Baird, Chris Reese and Marguerita Choy)
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