LONDON: Oil prices dropped on Thursday as high stockpiles in the United States and expected increased output from Libya offset potential supply risks linked to the Ukraine-Russia crisis, traders said.
West Texas Intermediate (WTI) for delivery in June fell 48 cents to $99.26 a barrel.
Brent North Sea crude for June slid 71 cents to $107.36 a barrel around midday in London.
"The biggest direct reason (for lower prices) is that US stockpiles of crude oil have risen," said Ken Hasegawa, energy market analyst at Newedge brokers.
The Department of Energy's weekly estimate of crude oil stocks showed a gain of 1.7 million barrels to 339.4 million barrels -- the highest weekly level since 1982.
Wednesday's data came as the US government's growth estimate for the January-March quarter came in much lower than expected, at an annual pace of 0.1 percent, suggesting the extremely severe winter weather virtually froze economic activity.
The Federal Reserve, after a two-day policy meeting, confirmed the recent weakness in the US but said that economic activity "has picked up recently," injecting some optimism into the market.
Downward pressure on prices also came from the expected resumption of oil exports from a key terminal in Libya, the Zueitina port, which has been blocked by rebels for months.
Supporting oil futures in recent weeks has been market concern that a full-scale armed conflict over the Ukraine-Russia situation would disrupt supplies and send energy prices soaring.
Ukraine is a major conduit for Russian natural gas exports to Western Europe.
The International Monetary Fund has thrown a $17-billion lifeline to recession-wracked Ukraine, whose president has admitted that authorities are powerless to prevent pro-Russian militants over-running the east of the country.
As tensions remained high, Ukraine staged a military drill in the government quarter in central Kiev early Thursday, involving some 10 armoured personnel carriers and soldiers armed with Kalashnikov rifles.
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