Oil prices eased in Asian trade today following a rally in the previous session, analysts said.
US benchmark, West Texas Intermediate (WTI) crude for June delivery, was down 33 cents at $102.04 a barrel in mid-morning trade, while Brent North Sea crude for June delivery dropped 19 cents to $110.
Prices climbed in US trade yesterday after a Department of Energy report showed drawdowns at the Cushing, Oklahoma, terminal that fuelled hopes that demand had picked up in the world’s biggest oil consuming nation.
However, Michael McCarthy, chief market strategist at CMC Markets, in Sydney said: “There are concerns that the spike is due to changes in the distribution structure rather than an increase in demand.’’
He said the drop at Cushing was due to better distribution through the southern leg of the Keystone XL pipeline, which transports oil to Gulf Coast refineries in Texas.
The overall US crude oil stockpiles data — which includes those outside Cushing — showed supplies rising 900,000 barrels in the week ending May 9.
However, the fall in prices has been tempered by the ongoing crisis in Ukraine, with Russian Foreign Minister Sergei Lavrov saying on Wednesday that the former Soviet state was on the brink of civil war.
Ukraine is a major conduit for Russian oil and gas exports to Western Europe, and analysts fear that an escalation of the conflict could disrupt supplies and send prices soaring.