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US oil lifted by Cushing drawdown ahead of stockpile data; Brent dips

U.S. crude futures rose on Tuesday as expectations of a build in inventories were undermined by record low stocks at the benchmark's Cushing delivery point, while Brent was near flat, weighing the Ukraine crisis against rebounding Libyan supplies.

U.S. commercial crude inventories were forecast to have hit a record high for the third straight week, and a climb above 400 million bbls for the first time on record was seen possible. However, stocks at the Cushing, Oklahoma, delivery point for U.S. crude have dropped in the last three weeks as new infrastructure relieves recent bottlenecks at the key oil hub.

While Tuesday was quieter than recent days in eastern and southern Ukraine, the deadliest week since the separatist uprising began has transformed the conflict, hardening positions as supporters of Russia and of a united Ukraine accuse each other of tearing the country apart.

Source: Denver International Airport

Brent crude was down 60 cents near $107. U.S. oil ended up 2 cents at $99.50.

The United States trade deficit narrowed in March as exports rebounded to the second-highest level on record, also a supportive signal for U.S. crude. A smaller trade deficit can bolster growth because it means American companies are earning more on their overseas sales.

The potential for increasing oil output from Libya remained a background factor weighing on Brent even though the vital southern El Sharara oilfield remained closed and new protests shut the Zultun and Raquba oilfields in the central eastern region of the OPEC producer.

The American Petroleum Institute (API), an industry group, is due to issue its weekly inventory report on Tuesday at 4:30 p.m. EDT (2030 GMT), while the U.S. Energy Information Administration (EIA) will issue its official report on Wednesday.

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