May 8 (Bloomberg) -- West Texas Intermediate fell by the most in three days, dropping from a one-week high reached yesterday after U.S. crude inventories shrank for the first time since March. Brent declined in London amid signs that tension in Ukraine may recede.
Futures decreased by as much as 0.4 percent in New York after rising 1.3 percent yesterday. Crude stockpiles fell by 1.78 million barrels last week as supplies at Cushing, Oklahoma, the delivery point for WTI, dropped to the lowest level since December 2008, the U.S. Energy Information Administration reported. Russian President Vladimir Putin called on separatists in Ukraine to postpone a vote for autonomy and said he pulled troops from the country’s border after weeks of tension.
“There was a big surprise yesterday with the drop in crude oil inventories that prompted support for prices, so today it looks as though there is a bit of profit-taking,” Myrto Sokou, senior research analyst at Sucden Financial Ltd. in London, said by phone. “The release of the weekly U.S. jobless claims data could offer some momentum,” later today, she said.
WTI for June delivery was at $100.52 a barrel in electronic trading on the New York Mercantile Exchange, down 25 cents, at 11:30 a.m. London time. The contract gained $1.27 to $100.77 yesterday, the highest close since April 29. The volume of all futures traded was about 11 percent below the 100-day average for the time of day. Prices have advanced 2.1 percent this year.
Brent for June settlement was 42 cents lower at $107.71 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $7.18 to WTI on ICE, narrowing for a fourth day by 18 cents.
WTI slid 0.8 percent last week as U.S. crude inventories expanded to the highest level since the EIA began publishing weekly reports in 1982. Stockpiles decreased to 397.6 million in the seven days ended May 2, according to the Energy Department’s statistical arm. That’s the first decline in five weeks.
Supplies at Cushing, the largest U.S. storage hub, fell by 1.4 million barrels to 24 million, the EIA said. Stockpiles have shrunk since the southern portion of the Keystone XL pipeline began moving oil to the Texas Gulf Coast in January.
“There could be seasonal factors underlying that draw in inventories,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney who predicts investors may sell West Texas contracts if prices climb to $103 a barrel. “The picture at Cushing might be slightly distorted by the fact that we have new infrastructure in place.”
Gasoline inventories rose by 1.61 million barrels to 213.2 million, the data show. Distillate fuels, including heating oil and diesel, dropped by 447,000 barrels to 114 million.
Ukraine’s border service said it wasn’t able to confirm Russia’s troop pullback and that military drills near the frontier continued. The government in Kiev and its U.S. and European allies have accused Russia of fomenting separatist unrest and warned that Putin may follow his annexation of Crimea with another land grab against his neighbor.
“We have seen no change in the Russian force posture along the Ukrainian border,” Army Col. Steve Warren, a Pentagon spokesman, told reporters yesterday.
U.S jobless claims are forecast to drop to 325,000, according to Bloomberg survey. The data will be released today at 8:30 a.m. New York time.
In Canada, the biggest supplier of foreign oil to the U.S., the restart of an Enbridge Inc. pipeline was held back after SaskPower International Inc. indicated delays in restoring electricity at pump stations. Line 4, which can carry as much as 796,000 barrels a day to the U.S. Midwest, closed on May 5.
The shutdown may extend to “early in the morning” today, Graham White, an Enbridge spokesman in Calgary, said in an e- mailed statement.
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