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Crude slips, but global woes contain losses

Global oil prices fell on Tuesday as traders took profit after a long holiday weekend, and Ukraine's new president launched a fresh offensive against rebel groups, giving traders an impression of stability in spite of renewed violence.

Analysts expect any price weakening to be brief as Libyan oil exports fell further and conflict in the eastern Ukrainian city of Donetsk could raise the risk premium.

Brent crude was down 20 cents near $110 a barrel. The contract touched an intraday peak of $111.04 a barrel on Thursday, its highest in more than two and a half months. U.S. light crude oil fell 24 cents to end near $104.11.

U.S. gasoline fell 2 cents to $3.0026 a gallon as traders sold long positions taken before Monday's holiday in the U.S. for Memorial Day, which marks the start of the summer driving season.

Gas is flared as waste from the Monterey Shale formation where gas and oil is extracted using hydraulic fracturing, or fracking, in March 2014 near Buttonwillow, Calif.
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Gas is flared as waste from the Monterey Shale formation where gas and oil is extracted using hydraulic fracturing, or fracking, in March 2014 near Buttonwillow, Calif.

U.S. commercial crude stocks are expected to have fallen further last week at Cushing, Oklahoma, analysts said. Weekly inventory data has been delayed by a day due to the holiday on Monday. Industry group, the American Petroleum Institute, will release data Wednesday at 4:30 p.m. Eastern, while the U.S. Energy Information Administration will release its report Thursday at 11:00 a.m. Eastern.

In Libya, new protests slowed work at Hariga port as the OPEC producer's output fell to 160,000 barrels per day (bpd), far less than the 1.4 million bpd produced before the 2011 uprising against Muammar Gaddafi.

Meanwhile, Ukrainian forces fought separatists in Donetsk for a second day on Tuesday after inflicting heavy losses on the pro-Russian rebels. The rebels had occupied strategic points in Donetsk and other towns in the east shortly after Sunday's presidential election. The election victor, Petro Poroshenko, rejected any talks with "terrorists." Ukraine is a main gas supply route to Europe from Russia, and investors worry the conflict could disrupt oil supplies as well.

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Symbol
Price
 
Change
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OIL
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