Oil stays above US$104 barrel; investors weigh effect of conflicts on supplies

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The price of oil remained above US$104 a barrel Tuesday as investors weighed how conflicts in Ukraine and Libya were likely to affect crude supplies.

Benchmark West Texas Intermediate crude for July delivery fell 24 cents to US$104.11 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils, dropped 30 cents to US$110.02 on the ICE Futures exchange in London.

Ukraine is a key conduit for Russian gas deliveries to Europe. A proposed solution to a dispute over Ukrainian natural gas debts to Moscow raised hopes that a supply cutoff would be averted. Russia’s acceptance of Petro Poroshenko’s victory in Sunday’s presidential elections was also regarded as a sign of easing tensions.

But the resurgence of fighting, with the government in Kyiv launching an airstrike on pro-Russia separatists occupyin the airport in Donetsk, a city of about one million in eastern Ukraine, underscored the uncertainties that remain.

Meanwhile, in Libya, which has been unable to stabilize since the ouster of Moammar Gadhafi in 2011, the National Oil Corp. said crude exports stood at 160,000 barrels a day, down from 1.4 million barrels a day a year ago. Several key export facilities are controlled by militias who do not recognize the central government.

In other energy futures trading on the Nymex, wholesale gasoline fell three cents to US$3 a U.S. gallon (3.79 litres), heating oil slipped two cents to US$2.94 a gallon and natural gas rose 10 cents to US$4.51 per 1,000 cubic feet.

(TSX:ECA), (TSX:IMO), (TSX:SU), (TSX:HSE), (NYSE:BP), (NYSE:COP), (NYSE:XOM), (NYSE:CVX), (TSX:CNQ), (TSX:TLM), (TSX:COS), (TSX:CVE)

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