Oil fell to around $106 a barrel on Wednesday, reaching a six-week low, as concerns eased about an escalation of the Ukraine crisis and on a larger-than-expected rise in U.S. crude inventories.
Russian President Vladimir Putin signed a treaty on Tuesday making Crimea part of Russia again but said he did not plan to seize any other regions of Ukraine. Western sanctions imposed on Monday targeted individuals, not broad trade.
Brent was down 75 cents at $106.04 a barrel by 1441 GMT. It reached an intra-day low of $105.81, the lowest since Feb. 5. U.S. crude rose 45 cents to $100.15.
“For Brent, we are at similar levels to yesterday. Ukraine and the Crimea are not having much impact,” said Christopher Bellew, a broker at Jefferies Bache in London.
An oil supply report from the U.S. government’s Energy Information Administration released at 1430 GMT said crude stocks rose by 5.85 million barrels last week.
That was more than analysts had expected and essentially confirmed a report by industry group the American Petroleum Institute the day before showing a rise in crude stocks.
Still, U.S. crude gained support from data in the API and EIA reports showing that stocks at the Cushing, Oklahoma oil hub had fallen by about 1 million barrels.
Also 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.
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