* Putin orders troops in military exercise back to base
* U.S., EU warn Russia could face sanctions over Crimea
* U.S. crude stocks at Cushing likely off 2.6 mln barrels -
* Coming up: EIA data out on Wednesday 10:30 a.m. EST (1530
(Updates with API data, paragraphs 9, 10)
By Elizabeth Dilts
NEW YORK, March 4 Crude oil fell nearly 2
percent on Tuesday on comments from President Vladimir Putin
that eased concerns Russia would escalate its military
intervention in Ukraine's Crimea peninsula.
Putin told reporters Russia reserved the "right" to
intervene in the Ukraine crisis, but would only use force as a
Coupled with news that Russian troops engaged in military
exercises near the Ukraine border were ordered to return to
their bases, oil prices slid from the five-month highs it
"The receding fears of a disruption of the Russian crude oil
supply and the easing geopolitical concerns are weighing on
crude," said Dwayne Pliska, senior trading consultant for
HighGround trading in Chicago, Illinois.
April Brent crude settled $1.90 lower at $109.30 a
barrel, after it ended the previous session at its highest close
U.S. crude for April delivery settled $1.59 lower at
$103.33, after rising to $105.22 on Monday, the highest level
since Sept. 19.
Oil products prices retreated in tandem with U.S. crude. New
York ultra-low sulfur diesel futures, often called
heating oil, fell nearly 4 cents to $3.0407 per gallon, after it
settled more than 6 cents higher at $3.0805 in the previous
U.S. gasoline RBOB fell by more than 3 cents to
$2.9853 per gallon after it settled more than 4 cents higher a
U.S. commercial crude oil inventories rose by 1.2 million
barrels last week, in line with expectations, inventory data
released by the American Petroleum Institute showed on Tuesday.
Stockpiles at Cushing, Oklahoma, where the American benchmark is
priced, fell by 2.6 million barrels, the data showed.
The government's Energy Information Administration will
publish its data on Wednesday at 10:30 a.m. EST.
Putin's statements raised investors' hopes for a peaceful
resolution with Ukraine. The crisis caused a sell-off in global
equities on Monday as investors worried the oil supply from
Russia, the world's second largest producer, could be disrupted
or subject to sanctions.
Imports of Russian oil are so crucial for Europe that it is
unlikely sanctions will be imposed, said Seth Kleinman, head of
energy research at Citi.
In Libya, top officials production at the El Sharara
oilfield may resume as they are working to address protesters
demands. Production there has fallen to little over 200,000
barrels per day from 1.4 million bpd in July due to protests
that closed the oilfield in the eastern region of the country.
(Additional reporting by Simon Falush and Shadi Bushra in
London, Florence Tan in Singapore; Editing by Marguerita Choy)