SINGAPORE: Brent crude held steady just below $108 a barrel on Thursday, as investors looked for direction after easing geopolitical risk over the crisis in Ukraine and U.S. data suggesting weaker oil demand prompted a heavy sell-off over the past two days.
Oil prices have fallen between $4 and $5 a barrel since spiking on Monday due to the threat of an armed conflict in Ukraine and tension between Russia and the West over the former Soviet republic.
The drop was aggravated by a larger than expected rise in U.S. crude stocks and by data showing private employers in the United States added fewer workers than forecast in February and services sector growth hit a four-year low.
"The market has collectively come to the conclusion that an armed conflict in Ukraine is not on the cards, so we've seen speculative positions being sold off," said Michael McCarthy, chief strategist at CMC Markets.
"Combined with the strength in crude supply in the United States, there doesn't seem to be much upside for oil at least in the short term," McCarthy said.
Brent oil for April delivery was up 20 cents at $107.96 a barrel at 0754 GMT, after settling $1.54 lower. The contract hit $112.39 on Monday, its highest since Dec. 30, but it settled on Wednesday below its key 200-day moving average of $108.41 for the first time in a month.
U.S. crude for April delivery was 26 cents lower at $101.19 a barrel, after dropping $1.88 in the previous session.
Geopolitical worries over Ukraine eased on Wednesday as high-level diplomatic efforts to resolve the crisis in Kiev got underway in Paris. Foreign ministers from Ukraine, Russia and Western nations agreed to continue discussions in coming days on how to stabilize the situation, U.S. Secretary of State John Kerry said.
Still, slim gains in global equities and a slightly higher Brent price suggested investors were not that convinced that the Ukraine crisis is off the table.
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