Oil above $102 on Ukraine crisis, U.S. supply drop

The price of U.S. oil climbed above $102 a barrel Wednesday amid ongoing tensions in Ukraine and an industry report showing crude stocks falling at a key U.S. storage hub.

By early afternoon in Europe, benchmark U.S. crude for June delivery was up 38 cents to $102.08 a barrel on the New York Mercantile Exchange. On Tuesday, the Nymex contract jumped $1.11 to settle at $101.70, its highest close since April 24. Brent crude, an international benchmark, was up 54 cents to $109.78 a barrel on the ICE Futures exchange in London.

Much of the focus in energy markets remains centered on Ukraine, where the government has agreed to launch talks on decentralizing power within the framework of a European-backed peace plan. However, pro-Russian insurgents who have declared independence in two eastern regions have not been invited. On Tuesday, officials said six soldiers were killed and nine injured in an ambush by the insurgents.

"Prices were boosted by the escalation of the situation in east Ukraine," analysts at Commerzbank in Frankfurt said in a report.

Oil prices were also supported by a report from the industry-funded American Petroleum Institute that showed an unexpected decline of 590,000 barrels in crude stockpiles in Cushing, Oklahoma, the Nymex contract's settlement point. Crude supplies, however, rose overall by 912,000 barrels.

On Wednesday, the Energy Department will issue its benchmark report on U.S. crude supplies. According to a survey of analysts by Platts, they are forecast to have fallen last week by 1.5 million barrels. That would be the second weekly decline since the nation's supply of oil reached a record 399.4 million barrels as of April 25.

In other energy futures trading in New York:

- Wholesale gasoline gained 1.77 cents to $2.9333 a gallon.

- Natural gas added 4.1 cents to $4.399 per 1,000 cubic feet.

- Heating oil rose 1.11 cents to $2.9551 a gallon.

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