The price of crude oil rose to a five-week high Wednesday amid unrest in eastern Ukraine, even as a report showed a large rise in U.S. supplies.
Benchmark West Texas Intermediate crude for May delivery gained $1.04 to close at US$103.60 on the New York Mercantile Exchange. The contract, which gained $2.12 on Tuesday, last closed above $103 on March 4.
Brent crude, used to set prices for international oil varieties, rose 31 cents to US$107.98 on the ICE Futures exchange in London.
Traders are uneasy about the potential for disruption of supplies due to instability in eastern Ukraine and more sanctions on Russia, a crucial supplier of oil and natural gas to Europe. Pro-Russian separatists have seized government buildings in several cities in Ukraine’s industrial east in the aftermath of Russia’s annexation of Crimea.
Meanwhile, the announced reopening of four Libyan export terminals could turn out to be a drawn-out process, meaning it is unlikely to boost supplies imminently, analysts concluded.
Oil rose despite a report of surging U.S. crude supplies. The Energy Department’s Energy Information Administration reported that oil supplies rose by four million barrels last week, well above the 2.5-million-barrel increase called for in a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos..
Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, wrote in a letter to clients that the one positive from the report was a decline of 5.2 million barrels in gasoline supplies. Still, he thinks the overall supply numbers signal lower oil prices.
“We have much difficulty building a case for advances beyond this level. US crude stocks continue to mount as a result of rapidly rising domestic production,” he wrote.
In other energy futures trading in New York, wholesale gasoline added three cents to US$3.01 a U.S. gallon (3.79 litres), heading oil gained two cents to US$2.95 a gallon and natural gas rose five cents to US$4.59 per 1,000 cubic feet.