Crude oil continues to ease trading at 99.41 while Brent oil is down 7 cents at 107.71. Traders seem to be largely ignoring violence and tension in the Ukraine as President Putin does not seem to be holding the energy card over the heads of the West. Putin seems to be trying his best to quell the ongoing violence. Russian President Vladimir Putin urged Ukraine to withdraw forces from its easternmost regions as the International Monetary Fund warned that extra financing may be needed if control of the industrial heartland is lost.
In a telephone call yesterday with German Chancellor Angela Merkel, Putin also demanded an end to violence gripping cities in southeastern Ukraine, according to a Kremlin statement. The Ukrainian conflict will top the agenda when Merkel and U.S. President Barack Obama meet today in Washington, according to White House spokesman Jay Carney.
Oil prices declined Thursday on concerns over China’s economic slowdown and potential supply increase from Libya. The purchasing managers’ index (PMI) for the manufacturing sector rose to 50.4 last month, up from 50.3 in March, according to a statement jointly released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing.
Although China’s manufacturing growth continued to rise in April, the sub-index for export new orders dropped, fueling market worries over China’s economic slowdown in the first quarter.
Moreover, an oil port in Libyan, which has been closed for about 10 months due to protests, is said to have started loading oil again from Thursday.
On Wednesday the US Department of Energy’s weekly estimate of crude oil stocks gained 1.7 million barrels to a record 339.4 million barrels. U.S. crude stocks rose by 1.7 million barrels to just shy of 400 million last week, data showed on Wednesday, the highest since the U.S. Energy Information Administration started collecting data in 1982. “The US market is certainly well-stocked, with April 25 crude oil inventories reaching a fresh 83-year high. Last week’s builds in US product inventories add some weight to the overall bearish shift.” Downward pressure on prices was also coming from the expected resumption of oil exports from a key terminal in Libya, the Zueitina port that has been shut down by protests for months. Libya’s eastern Zueitina oil port was expected to receive late on Thursday its first tanker of crude since reopening after nearly ten months due to protests, state-run National Oil Corp (NOC) said.