Oil prices on the rebound

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Reuters

File photo: Toru Hanai

London - Oil prices rebounded on Thursday as heightened tensions in Ukraine overshadowed data showing US commercial crude inventories reaching an all-time high, analysts said.

New York's West Texas Intermediate for delivery in June, rose 24 cents to $101.68 a barrel.

Brent North Sea crude for June climbed seven cents to stand at $109.18 a barrel around midday in London.

Both contracts had tumbled on Wednesday on the US stockpiles data, which indicated softer demand at a time of robust production in the world's biggest oil consuming nation.

Stocks rose 3.5 million barrels to 397.7 million for the week ended April 18, official figures showed, larger than the 2.4

million expected by analysts.

Sanjeev Gupta, senior analyst at financial services group EY, said on Thursday that “oil markets will continue to be influenced by geopolitical events”.

In Eastern Europe an agreement between Ukraine, Russia and Western powers in Geneva last week to pull the country from the brink of civil war appeared shaky.

Russia has since hinted that it will strike back if its “legitimate interests” in the former Soviet state are attacked after Kiev sent in forces to dislodge militants who have occupied government buildings there.

Moscow wants Ukraine's pro-Western government to withdraw its forces.

Ukraine, a major conduit for Russian natural gas to Western Europe, is monitored closely by investors who are concerned that a full-scale armed conflict will disrupt supplies, causing a potential spike to prices.

Sapa-AFP


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