* U.S. crude stocks fall slightly more than expected
* NATO says Russia massed 20,000 combat-ready troops on
* U.S. crude exports jump to highest since 1950s
By Jacob Gronholt-Pedersen
SINGAPORE, Aug 7 Brent crude rose from near
four-month lows toward $105 a barrel on Thursday, supported by a
decline in U.S. oil inventories and an escalation of East-West
tension over the conflict in Ukraine.
Crude inventories in the United States fell slightly more
last week than analysts had expected, while exports of crude oil
from U.S. shores jumped in June to the highest since the 1950s,
the Energy Information Administration (EIA) said.
NATO said Russia had massed large amounts of troops on
Ukraine's border and could use the pretext of a humanitarian
mission to invade.
"We are seeing a bit of disinterest on the crude side with
respect to the Ukrainian conflict," said Mark Keenan, head of
commodities research in Asia at Societe Generale.
"At the moment people are more concerned about long-term
supply disruptions," he said.
Brent crude for September delivery was 21 cents
higher at $104.80 a barrel by 0254 GMT, after settling 2 cents
U.S. crude traded 16 cents higher at $97.08 a barrel.
The contract dropped to as low as $96.69 on Wednesday, its
weakest since early February.
Crude stocks at Cushing, Oklahoma - the delivery hub for the
U.S. crude contract - rose by 83,000 barrels in the week to Aug.
1, EIA said.
Total crude inventories fell 1.8 million barrels, much less
than the 5.5-million barrel decline reported earlier by industry
group American Petroleum Institute, while lower refinery output
contributed to a surprise sharp drop in gasoline and distillate
inventories, the data showed.
A further sign of ample supply on global crude markets and
underscoring a dramatic shift in global flows caused by the U.S.
shale oil boom, EIA said exports of crude oil jumped in June to
the highest since the 1950s, topping OPEC member Ecuador in
supplying global markets.
Still, the potential for U.S. crude output is
underestimated, according to the head of Pioneer Natural
Resources, the largest operator in the Permian Basin,
who said production could hit up to 14 million barrels per day
in a few years.
FRUIT AND VEGETABLES
In its starkest warning yet that Moscow could mount a ground
assault on its neighbour Ukraine, NATO said Russia had massed
around 20,000 combat-ready troops on Ukraine's border.
As rebels have lost ground to Ukrainian government troops,
Russia announced military exercises this week near the border.
In retaliation against Western sanctions over its support
for rebels in Ukraine, Russia said it will ban all imports of
food from the United States and all fruit and vegetables from
"Sanctions against Russia is not really impacting oil, but
more the machinery and financing that Russia needs to grow
supply from shale and deep water," said Keenan.
"If that starts getting hampered, then long-term production
will be affected, which is causing the back-end of the curve to
increase," he said pointing to a disconnect in prices for oil
futures contracts due for delivery 1.5-2 years from now.
In a sign that China's sputtering economy takes its taking a
toll on key industrial sectors, diesel demand in the world's
second largest oil consumer is set to post its first fall in
more than a decade this year, sources at the country's top oil
Iran's oil exports slipped for a second month in July, yet
sales remained above the limit set by the West under an interim
deal aimed at curbing Iran's nuclear programme, according to
sources who track tanker shipments.
(Reporting By Jacob Gronholt-Pedersen; Editing by Michael