24 August 2014, News Wires – US crude oil futures fell on Friday for a fifth straight week of declines while Brent remained under pressure from a stronger dollar and plentiful supplies despite an escalation of tensions between Russian and Ukraine.
Ukraine declared on Friday that Russia had launched a “direct invasion” of its territory after Moscow sent a convoy of trucks across the border into eastern Ukraine where pro-Russian rebels are fighting government forces, Reuters reported.
“You’d think with increasing tensions between Russia and Ukraine, we’d be going up a bit, but the market maybe doesn’t care as much about Russia because up until now, we haven’t had any supply disruptions,” said Phil Flynn, an analyst for the Price Futures Group in Chicago.
US crude for October fell 31 cents to settle at $93.65 a barrel, paring earlier losses of more than $1 that brought US crude to $92.92. On Thursday, US crude dropped to $92.50, its lowest price since January.
It ended the week down 3.9% in a fifth straight week of losses, the longest streak of weekly drops since November 2013.
Brent fell 34 cents to settle at $102.29 a barrel in its second straight week of losses. Brent has fallen in six out of the past nine weeks as it beat a retreat from its June highs above $115.
Traders and analysts said higher inventory at Cushing, Oklahoma, pushed the markets lower Friday after stocks in the delivery point for the US oil contract fell to six-year lows this month.
“I think the market is still reflecting on the big build in Cushing this week,” said Dominick Chirichella, senior partner at Energy Management Institute. “I think we’re (also) expecting another build this week.”
Last week, crude stocks at the Cushing delivery hub rose by 1.8 million barrels to 20.2 million barrels, the first time stocks there topped 20 million in a month, data from the Energy Information Administration showed on Wednesday.
A rally in the US dollar to just below its 2014 peak on Friday put downward pressure on oil as this makes dollar-denominated commodities more expensive for holders of other currencies.
Friday’s more modest declines followed hefty sell-offs this week that drove Brent to its lowest since June 2013.
In Libya, oil production continued to increase after the reopening of several eastern ports. Officials have also loaded a second tanker at Es Sider, Libya’s largest oil export terminal, after it was shut for a year.
Export volumes from Iraq remain near record levels despite an insurgency by Islamic State militants in the north. Crude is also being exported from Iraqi Kurdistan via Turkey in defiance of Baghdad.