Ukrainian, Libyan tensions still keeping Brent on a seven-week high

Brent futures held near seven-week highs above $110 a barrel as repeated hiccups in Libya’s attempts to boost exports and escalating tensions over Ukraine between top oil producer Russia and the West worsened supply disruption fears.

A rebel group in Libya’s east that controls several ports said it would not reopen the Ras Lanuf and Es Sider terminals unless the Tripoli government implemented its part of a deal to end the oil blockade.

Ukrainian forces killed up to five pro-Moscow rebels in what amounted to the first use of lethal force to recapture territory from the fighters, with the US accusing Russia of trying to destabilise the region. NATO says Russia has built up a force of about 40,000 troops in its border with Ukraine. Moscow says some are stationed there permanently, while others have been deployed as a precaution to protect Russia from the instability in Ukraine.

Brent crude, set to post a third week of gains – the longest streak since one that ended in early September 2013 – rose 2 cents to $110.35 a barrel early on Friday, after settling up $1.22.

The unfolding crisis would keep Brent supported between $105 and $110 a barrel and the US benchmark above $100 a barrel.

Crude inventories climbed by 3.5 million barrels in the week ending 18 April, more than analyst expectations of a 2.3 million-barrel build. At 397.7 million barrels, they are at their highest since 1982, when the EIA began collecting data.  The previous peak was reached in May 2013 at 397.6 million barrels. With oil production at its highest level since 1988 and the export of crude severely limited, crude inventories have been broadly edging higher.