WTI and Brent make gains

West Texas Intermediate oil rose (NYMEX:CLQ14) after an industry report showed stockpiles at Cushing, Oklahoma, the contract’s delivery point, tumbled. Brent (NYMEX:SCQ14) gained as fighting intensified in eastern Ukraine.

Supplies at the hub fell by 1.4 million barrels last week, the American Petroleum Institute was said to have reported yesterday. The Energy Information Administration, the Energy Department’s statistical arm, will release its U.S. inventory data today. Separatists shot down two Ukrainian fighter jets in the same region where Malaysian Air flight MH17 was destroyed, the government said. U.S. Secretary of State John Kerry flew to Israel in pursuit of a truce in Gaza.

“If today’s EIA Cushing number replicates what the API had it will fire things up quite a bit,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “This continues to be a headline driven market and any surprise from Ukraine or Gaza could shake things up.”

WTI for September delivery advanced 10 cents to $102.49 a barrel at 9:09 a.m. on the New York Mercantile Exchange. The August contract expired yesterday after losing 17 cents to $104.42. The volume of all futures traded was 31 percent below the 100-day average for the time of day.

Brent for September settlement rose 56 cents, or 0.5 percent, to $107.89 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a $5.40 premium to WTI, up from $4.94 at yesterday’s close.

The EIA report is projected to show that nationwide crude supplies declined by 2.9 million barrels to 372.1 million, according to the median of nine analyst responses in a Bloomberg survey. The agency is scheduled to publish its report at 10:30 a.m. in Washington.

Fuel stockpiles

U.S. gasoline inventories probably increased by 1 million barrels to 215.5 million barrels in the seven days ended July 18, according to the survey. Stockpiles of distillate fuel, a category that includes diesel and heating oil, probably rose 2 million barrels.

Gasoline for August delivery dropped 0.41 cent to $2.8766 a gallon on the Nymex. Ultra low sulfur diesel for August delivery gained 1.6 cents, or 0.6 percent, to $2.8702 a gallon.

U.S. gasoline pump prices dropped 0.7 cent to $3.558 a gallon nationwide yesterday, the lowest since March 31, according to AAA, the largest U.S. motoring group.

Brent rebounded last week for the first weekly gain in a month after Flight MH17 was shot down over rebel-held territory in eastern Ukraine, killing all 298 passengers and crew. The incident threatened to intensify the worst crisis between the West and Russia since the end of the Cold War.

The European Union will consider restricting Russia’s access to capital markets and sensitive technologies unless President Vladimir Putin expedites the investigation of the plane crash, three officials said yesterday.

Israel doesn’t plan to stop its Gaza Strip offensive as long as the Palestinian territory’s Hamas rulers continue to pose a threat, Justice Minister Tzipi Livni said on Israel Radio.

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