May 8, 2014 / 6:32 AM / 4 years ago

UPDATE 8-U.S. crude falls on technical trade, eyes Ukraine conflict

* Libyan rebels boycott new PM, keep 2 ports closed

* Pro-Russian rebels in Ukraine to go ahead with referendum

* China’s crude oil imports jump 22 pct to record in April

* Oil prices up more than $1 on Wed on U.S. crude stock drop (Rewrites throughout, adds settlement prices, analyst commentary)

By Elizabeth Dilts

NEW YORK, May 8 (Reuters) - U.S. crude oil prices fell on Thursday after hitting resistance at a key technical level, and Brent also fell as traders awaited developments in Ukraine.

Low oil exports from Libya, where rebels refuse to cooperate with the new prime minister to reopen major ports, and rising oil imports to China provided some support to the markets.

New jobless claims fell last week in the United States, a sign of a strengthening labor market that also helped set a floor beneath U.S. crude oil prices.

The U.S. Energy Information Administration’s inventory report on Wednesday showed an unexpected drop in U.S. commercial crude inventories and a drop in stocks at the Cushing, Oklahoma, delivery point for U.S. crude last week.

The market appeared to ignore those supportive factors Thursday, outweighed by a strong U.S. dollar and weakness in the U.S. gasoline contract.

Brent futures, settled down 9 cents at $108.04 a barrel. U.S. crude settled 51 cents lower at $100.26 per barrel. Both contracts settled more than $1 higher on Wednesday, but U.S. crude encountered resistance at the 200-day moving average and could not continue a rally to the upside.

“I think it’s still reflective of yesterdays’ inventories and another draw in Cushing that helped to keep the market somewhat supported,” said Dominick Chirichella, a senior partner at Energy Management Institute in New York. “We have a limited downside. There are still a lot of international issues - Libya, Ukraine and Libya.”

Pro-Moscow separatists in eastern Ukraine ignored a public call Russian President Vladimir Putin to postpone a referendum on self-rule, declaring they would go ahead on Sunday with a vote that could lead to war.

U.S. Deputy Secretary of State William Burns said Russia was heading down a dangerous and irresponsible path and the situation in Ukraine was extremely combustible.

Putin’s surprise move on Wednesday and his announcement that Russian troops had withdrawn from the border with Ukraine have weighed on Brent, but caution remained in the markets as NATO and the White House said they were still waiting for evidence.


Libyan oil exports will remain stagnant at low levels for now as rebels in the east said they plan to boycott new Prime Minister Ahmed Maiteeq and keep two major oil terminals shut.

Brent prices had been pressured since the end of April after the rebels reached an agreement with Maiteeq’s predecessor, Abdullah al-Thinni, to reopen four ports. Only two smaller facilities have been handed over to government forces so far.

Government officials said they are committed to implementing the original agreement with rebels, but analysts said they are waiting for more substantial news. Libyan production remains at around 250,000 barrels per day, less than a fifth of the 1.4 million bpd output produced until mid-2013.

“Very much like Ukraine, Libya is a situation that, on a daily basis, can either put the wind in the sails or take it out of them,” said Smith.

Brent had received some support earlier in the session from Chinese data showing crude oil imports rose to a record 6.78 million bpd in April after slipping below 6 million bpd in March for the first time since November 2013.

The data also showed that total exports rose, against forecasts for a decline, offering some rare good news for China’s slowing economy. (Additional reporting by Julia Fioretti and Lin Noueihed in London, and Jacob Gronholt-Pedersen in Singapore; Editing by Susan Thomas, Jason Neely, Chizu Nomiyama and Marguerita Choy)

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