Futures were little changed in New York after losing 1.5 percent yesterday amid speculation tension was easing between Ukraine and Russia. President Vladimir Putin said he sees no immediate need to invade eastern Ukraine as the Obama administration threatened sanctions. U.S. crude inventories rose by 1.17 million barrels last week, the American Petroleum Institute reported. Government data today may show supplies expanded by 1.3 million, according to a Bloomberg News survey.

“We’re now moving away from the winter season and I expect refineries to go off-line for long periods, meaning we could see a larger-than-expected increase in crude supplies,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney. “There are still some risks to oil from the situation in Ukraine. I see the potential for price gains on the back of further headlines on the situation.”

WTI for April delivery was at $103.48 a barrel in electronic trading on the New York Mercantile Exchange, up 15 cents, at 2:22 p.m. Sydney time. The contract dropped $1.59 to $103.33 yesterday. The volume of all futures traded was about 4 percent above the 100-day average.

Brent for April settlement was down 15 cents at $109.15 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $5.67 to WTI. The spread closed at $5.97 yesterday, narrowing for a sixth day.

Fuel Supplies

WTI advanced 5.2 percent last month as cold weather boosted demand for heating fuels and crude supplies at Cushing, Oklahoma, shrank with the opening of a new pipeline.

Stockpiles at Cushing, the biggest U.S. oil-storage hub and the delivery point for New York-traded futures, declined by 2.63 million barrels in the week ended Feb. 28, the industry-funded API reported yesterday.

Distillate inventories, including heating oil and diesel, fell by 270,000 barrels, the API said. Supplies probably dropped by 1 million, according to the median estimate of nine analysts surveyed by Bloomberg before data from the Energy Information Administration, the Energy Department’s statistical arm.

Gasoline inventories decreased by 1.2 million, the API said. The government report is forecast to show stockpiles of the motor fuel slid by 1 million, the survey shows.

Chart Support

The API in Washington collects supply information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.

WTI has technical support along the lower boundary of an upward-sloping trend channel that started in mid-January, at about $102.70 a barrel today, according to data compiled by Bloomberg. This indicator is near where front-month futures halted intraday losses last week. Buy orders tend to be clustered around chart-support levels.

In Europe, Putin said extremists orchestrated a coup to dislodge President Viktor Yanukovych and that Russian speakers in Ukraine’s east and south need protection. Ukraine’s acting President Oleksandr Turchynov has said Russians aren’t at risk, while warning that a military invasion would be an act of war.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net

http://www.bloomberg.com/news/2014-03-05/wti-swings-near-103-on-supply-after-biggest-drop-in-two-months.html

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