Oil prices decline on ample supplies

Oil prices dropped Friday as U.S. crude stockpiles are still at a very high level now. U.S. crude inventories dropped 1.8 million barrels to 397.6 million barrels for the week ended May 2, said the Energy Information Administration Wednesday. But even with the pullback of last week, stockpiles are still very high now. The current level of crude inventories is 2.1 million barrels higher from one year earlier. Markets are still closely watching development in Ukraine. Amid the rising tension in Ukraine, reports said the European Union nations are preparing to impose sanctions on some Russian companies. The uncertainties of Ukraine put a big threat to the oil market. Russia is the second-largest producer of natural gas. More than 70 percent of Russian crude and gas exports to Europe pass through Ukraine. Traders said that a possible halt of Russian crude and natural gas supplies through Ukraine supported the crude prices. On the U.S. economic front, the Commerce Department said Friday inventories at the wholesale level jumped 1.1 percent in March from the prior month to 525.2 billion U.S. dollars, following a revised 0.7 percent gain in February. Light, sweet crude for June delivery moved down 27 cents to settle at 99.99 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery lost 15 cents to close at 107.89 dollars a barrel.