Brent and West Texas Intermediate crude declined as the conflict between Ukraine and Russia eased.
Brent sank as much as 0.8% while WTI slid 0.3% after Ukraine said negotiations with Russia were bearing fruits. The spread between the two crude benchmarks narrowed for a third day. WTI beat the $105 per barrel mark in early trading for the first time since March on expectations that US inventories dropped for a second week as a government report will show.
“There needs to be a steady flow of news to support prices at these lofty levels. WTI rose earlier on expectations of tightening supply, but that wasn’t enough to keep prices higher. All the markets are down after the big moves higher,” John Kilduff of New York-based Again Capital LLC told Bloomberg.
The per-barrel price of WTI for July delivery lost 29 cents or 0.3% to $104.12 as of 1:08 on the New York Mercantile Exchange. Contracts hit $105.06, the highest price in intraday trading since March 3. The volume of futures exchanged was 27% above the average for the past 100 days. Prices have gone up 5.8% in 2014.
July-delivery Brent declined 75 cents or 0.7 to $109.24 per barrel on the ICE Futures Europe exchange in London. Volume of futures traded was 49% above the average for the past 100 days.
Two days into talks with Russia, a deal was struck to implement in phases President Petro Poroshenko’s plan to end tensions, Ukraine’s Foreign Ministry announced.
According to a Reuters poll, US crude stockpiles are expected to fall by 1.5 million barrels. The American Petroleum Institute releases its supplies data on Tuesday. On Wednesday, the Energy Information Administration is expected to release its inventories figures.
Strategist Bill O’Grady told Bloomberg that Brent is being declining because eastern Ukraine is likley to report a cease-fire soon.
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