* U.S. crude future fall, Brent-WTI spread widens
* U.S. crude inventories seen close to record highs
* Ukraine crisis lends some support to Brent
(Adds settlement prices, contract expiry, updates spread price)
By Sabina Zawadzki
NEW YORK, April 22 U.S. crude futures fell on
Tuesday ahead of data expected to show that inventories in the
world's top oil-consuming nation have risen close to record
Brent also fell but was cushioned by continued concerns of
an escalation in the standoff in Eastern Ukraine that could lead
to further Western sanctions against Russia and disrupt supplies
from one of the world's biggest producers.
The disproportionate fall of West Texas Intermediate crude
futures led to the widening of the Brent-WTI spread by more than
a dollar. U.S. crude settled at $102.13, down $2.24 a
barrel, or more than 2 percent. Brent crude settled at
$109.27, down 68 cents.
The May U.S. crude oil contract expires at the end of
Tuesday making the June contract the new front month. But June
futures settled almost 2 percent lower, at $101.75 a barrel.
Analysts said in the absence of a major escalation in
Eastern Ukraine, where separatists still hold government
buildings in defiance of a peace accord struck last week,
attention instead has turned to U.S. crude oil inventories.
Stocks in the country are approaching all-time highs - after
building 10 million barrels in the week ending April 11 they
reached 394 million barrels, close to the record 398 million
barrels hit last year.
The Energy Information Administration will issue inventory
data on Wednesday while American Petroleum Institute data is due
later on Tuesday. Analysts polled by Reuters think 2.7 million
barrels were added to stocks last week.
"That's going to put us at a lofty level. The all-time
record is within shooting distance here," said Bob Yawger,
director of commodities futures at Mizuho Securities. "Many
market participants are wary of extending the upside ahead of
the EIA numbers tomorrow."
Weighing U.S. futures down is the unravelling of some of the
political risk premium associated with the crisis in Ukraine,
which has led to the worst confrontation between Washington and
Moscow since the Cold War.
"Going into the three-day holiday it was 'buy everything',
no one wants to be short into the weekend. Now traders
acknowledge the risk is Brent," said Phil Flynn, analysts at
Price Futures Group. "Definitely Brent is going to be the first
line of attack in the risk trade," he said.
Brent's milder decline caused the spread between it and the
U.S. benchmark West Texas Intermediate (WTI) CL-LCO1=R to
balloon to a peak of $7.67 a barrel, the widest since March 26.
In Ukraine, acting President Oleksander Turchinov called for
the resumption of an "anti-terrorist" operation in the east of
the country after a local politician from his party was found
dead there with signs of torture.
U.S. Vice President Joe Biden, visiting Kiev, warned Russia
"time is short" for defusing the situation there but Russia,
denying it is orchestrating militants in the east, retorted that
any resolution will take time.
Washington signalled on Monday it could impose sanctions on
Russian President Vladimir Putin. Oil investors fear further
sanctions may disrupt oil supplies from the key producer.
Investors are also watching progress of talks between Iran
and world powers to end Tehran's nuclear program. President
Hassan Rouhani's government confirmed it had reshuffled the
leadership of Iran's atomic agency to sideline nuclear experts
opposed to talks with the West.
(Additional reporting by Ron Bousso in London and Manash
Goswami in Signapore; Editing by Marguerita Choy, Tom Brown and