Oil prices dip on hopes of Ukraine crisis easing

Singapore: Oil prices dipped in Asia Thursday after Russian President Vladimir Putin held out a hand to crisis-hit Ukraine, raising hopes of an easing in the worst East-West standoff since the Cold War.

 US benchmark, West Texas Intermediate for delivery in July, eased 33 cents to $102.31 a barrel while Brent North Sea crude for July was down 17 cents at $108.23 in afternoon trade. "Benchmark prices fell due to the easing of tensions between Ukraine and Russia," said Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at consultancy firm EY.

Speaking to French media on Wednesday, Putin said he was ready to meet Ukraine's newly elected president Petro Poroshenko as well as Western European leaders at the sidelines of World War II ceremonies in Normandy, France. Group of Seven leaders, meeting without Putin as Russia was ejected from the G8 grouping in March, however urged Moscow to stop destablising Ukraine or face further sanctions.

The West has accused Russia of fomenting unrest in neighbouring Ukraine since the ousting of pro-Kremlin president Viktor Yanukovych in February. Moscow denies the allegation. Investors fear a full-blown conflict in the ex-Soviet state, a conduit for a quarter of European gas imports from Russia, will disrupt supplies and send energy prices soaring.

Analysts said oil prices were also under pressure as dealers digested a mixed US supply report.The Department of Energy on Wednesday said commercial crude stocks fell 3.4 million barrels last week, far more than expectations for a fall of 100,000. But gasoline stocks rose 200,000 barrels and distillate stocks jumped two million barrels; the latter was far above the 700,000 rise projected by analysts.

The surprisingly higher stocks of gasoline and other refined products suggested "weak demand during the Memorial Day weekend, which was the unofficial kickoff of the annual US summer driving season," Singapore's United Overseas Bank said in a note to investors.