* Troop carriers enter east Ukraine bearing Russian, separatist flags
* Tanker starts loading at Libya’s Hariga port
* China Q1 GDP growth at 18-month low of 7.4 percent
* China oil demand slips 0.6 pct in Jan-March
* U.S. weekly crude stocks up 10 mln barrels vs forecast 2.3 mln barrels -EIA (Adds prices at settlement, analyst comment)
April 16 (Reuters) – Brent crude rose toward $110 a barrel on Wednesday on mounting tensions in Ukraine, while prices for U.S. oil were nearly unchanged after a report showed a huge build in stockpiles, which canceled out geopolitical concerns.
Ukrainian government forces and separatist pro-Russian militia staged rival shows of force in eastern Ukraine on the eve of crucial talks on the former Soviet state’s future.
Brent crude has been buoyed by the tensions between Kiev and pro-Russian separatists in the east of the country in recent days. The Ukrainian government confirmed on Wednesday that six of its armoured vehicles were in the hands of Russian supporters.
Meanwhile, growing oil stockpiles in the United States have weighed on benchmark prices there, as production hit the highest level in more than a quarter of a century, and imports continued to rise.
Brent crude for June delivery rose by a dollar earlier in the session but pared gains to settle up 24 cents at $109.60 a barrel, its highest level since March 3. The May contract expired on Tuesday.
U.S. crude for May delivery rose 1 cent to settle at $103.76 a barrel. U.S. oil was up more than $1 before the EIA inventory report. Wednesday marked the U.S. oil options expiry for the May contract.
“With the long weekend coming and with tensions in Ukraine, there is a fear to sell U.S. crude, even though the inventory build was so high,” said Bill Baruch, senior market strategist at iitrader.com LLC in Chicago.
Crude oil stocks rose 10 million barrels to 394 million barrels in the week ending April 11, according to the Energy Information Administration (EIA), far more than the 2.3 million-barrel build expected by analysts. Inventories were boosted in part by a 5.2 million-barrel build on the Gulf Coast, to the highest level since the EIA began collecting data in 1990.
Brent’s premium to U.S. West Texas Intermediate CL-LCO1=R crude grew on Wednesday to the widest level since March 26.
“For Brent/WTI, there is a growing realisation that the United States is not short of crude,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas.
LIBYA LOADINGS
Growing scepticism that Libyan exports can resume quickly or sustainably has also supported Brent.
A tanker started loading at Libya’s eastern port of Hariga on Wednesday for the first time in nearly nine months, after a federalist group agreed to reopen the port last week.
But the larger terminals of Ras Lanuf and Es Sider remain in rebel hands and their fate is subject to further negotiations with the government of the OPEC exporter.
Fresh evidence of slowing economic growth in China, the world’s second-largest economy and oil consumer, had put pressure on oil prices early in the day though the data was stronger than many had expected.
China said its gross domestic product grew by 7.4 percent in the first quarter, the slowest pace in 18 months but slightly ahead of market forecasts of a 7.3 percent rise.
“It’s not necessarily a negative for oil, but it’s not providing the support that was anticipated,” said Michael McCarthy, chief strategist at CMC Markets in Sydney.
A slowing economy dampened energy use in China as its implied oil demand fell 0.6 percent to 9.96 million barrels per day in the first quarter, forcing refiners to scale back crude runs and raise exports to trim high fuel stocks. (Reporting by Edward McAllister in Los Angeles, Robert Gibbons in New York, Lin Noueihad in London; Additional reporting by Florence Tan; Editing by William Hardy, Dale Hudson, Paul Simao and Lisa Shumaker)
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