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Crude slides, yet steep US gas decline contains losses

U.S. crude fell by nearly $1 a barrel on Friday as traders took profit at the end of the month, but remained in the middle of a month-long trading range underpinned by supply worries and strong gasoline demand in the United States, the world's top oil consumer.

Brent also fell in range bound trade, but was supported by energy supply concerns as fighting continued in eastern Ukraine. Kiev's defense minister promised to push ahead with an offensive against rebels until "normal life" was restored.

Russia has warned that it will cut natural gas supplies to Ukraine in June over Kiev's gas debt, raising the possibility of deliveries to Europe being affected. But a European Union official said Friday he hopes to reach a deal by June 3.

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.

Brent was down 60 cents near $109 a barrel, but was still up nearly 2 percent for the month. U.S. crude fell 87 cents to settle at $102.71 a barrel, but overall rose more than 3 percent in May.

Oil supply from Libya, a source of high quality, light crude, remained near a tenth of capacity with protests and violence disrupting output.

U.S. consumer spending fell for the first time in a year in April but the decline, which followed two months of solid gains, did not change expectations for a sharp rebound in economic growth this quarter.

U.S. crude was partly under pressure from news of an overall rise in U.S. crude stocks, though other inventory figures were supportive. Gasoline stocks fell 1.8 million barrels, data from the U.S. Energy Information Administration showed Thursday, compared with expectations of a 300,000-barrel gain, indicating a strong start to the U.S. summer driving season.

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