Brent slips to 3-week low under $108 on hopes for Ukraine talks

Oil declined to a three-week low below 108 dollars a barrel on Thursday as worries about risks to supply caused by violence in Ukraine eased .

Ample supply in top oil consumer, the U.S, has also dragged down prices.

Brent crude futures fell for a fifth session, their longest losing streak since early January and were down 38 cents at 108.02 dollars a barrel.

Geopolitical tensions pushed up Brent to above 111 dollars a barrel last month, but prices have shed about three per cent since then.

U.S. crude fell 41 cents to 102.23 dollars a barrel.

Ukraine’s President-elect Petro Poroshenko said he may discuss a plan to end violence in eastern Ukraine with Russian leader Vladimir Putin.

Putin will hold face-to-face meetings with German Chancellor Angela Merkel, French President Francois Hollande and British Prime Minister David Cameron.

The meeting is scheduled to hold at a D-Day anniversary gathering in France later this week.

This helped allay concerns that conflict in Ukraine, a main gas supply route to Europe from Russia, could disrupt oil supplies as well.

“Avenues of communication are open and the talks this weekend mean the market is not as concerned as it was when the Crimea crisis erupted,” Christopher Bellew, said.

Bellew is a broker at Jefferies Bache.

Investors are eyeing an announcement later on Thursday from the European Central Bank which might unveil plans to introduce growth-boosting stimulus – a result that could lift oil demand.

Worries about the demand outlook for China, the world’s biggest energy consumer, also kept prices in check.

The International Monetary Fund (IMF) cut its 2015 economic growth forecast for China to about seven per cent, but urged authorities to avoid further stimulus measures.

China is enjoined to concentrate on curtailing financial risks instead.

Brent’s premium to West Texas Intermediate (WTI) crude on Wednesday fell below six dollars.

This is its narrowest fall since April 15 after crude stockpiles in the U.S. dropped more than expected on lower imports and higher refinery utilisation.

“But crude stocks remain near the top of the typical range for this time of year.

“This overall 8.8-million-barrel rise in total hydrocarbon inventories last week painted a bearish picture, ‘’BNP Paribas analysts said in a note.

“The scope for further increases in refinery runs from these levels however appears limited to us in the absence of a marked rise in product exports,” the analysts continued.

The U.S. is unlikely to repeat the sharp seasonal decline in crude stocks seen in June-July last year due to strong domestic production, they said.

The U.S. will also release employment data on Friday that may reinforce a recovery trend in the world’s largest economy. (Reuters/NAN)