* U.S. crude stocks fall slightly more than expected
* NATO says Russia massed 20,000 combat-ready troops on Ukraine border
* U.S. crude exports jump to highest since 1950s
By Jacob Gronholt-Pedersen
SINGAPORE, Aug 7 (Reuters) - 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 lower.
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.
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 Europe.
“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 majors said.
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 Perry)