May 23 (Bloomberg) -- West Texas Intermediate crude advanced as violence flared ahead of Ukraine’s May 25 presidential election.
Futures headed for their third weekly gain. An attack yesterday by pro-Russian rebels in Ukraine left 16 servicemen dead, the highest death toll for government forces since the separatist conflict in the eastern part of the country began in March. Libyan National Oil Corp. Chairman Nuri Berruien resigned, the company said. U.S. crude supplies tumbled 7.23 million barrels last week, the Energy Information Administration said May 21.
“Geopolitics appears to be the principal driver,” Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut, said by phone. “There’s a lot of wariness surrounding this weekend’s presidential election in Ukraine and concern about Libya. WTI is also up because of tightening supply.”
WTI for July delivery increased 24 cents to $103.98 a barrel at 9:50 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 53 percent below the 100-day average for the time of day. Prices have climbed 1.9 percent this week and 5.6 percent this year.
Brent for July settlement rose 2 cents to $110.38 a barrel on the London-based ICE Futures Europe exchange. Volume was 36 percent lower than the 100-day average. The European benchmark traded at a $6.40 premium to WTI.
The government in Kiev accused Russia of seeking to destabilize the country before the ballot. Ukrainian Prime Minister Arseniy Yatsenyuk called for a United Nations Security Council session on the situation. The North Atlantic Treaty Organization has estimated the number of Russian troops on the frontier at 40,000.
U.S. crude inventories dropped to 391.3 million barrels in the seven days ended May 16, the lowest level in six weeks, according to the EIA. Stockpiles rose to 399.4 million through April 25, the most since the Energy Department’s statistical arm began publishing weekly data in 1982.