Oil prices fell on Thursday, rising sharply in the first half of last week, as traders weighed a larger-than-expected build in US Oil inventories against tightening global supplies. Brent crude futures were down 45 cents, or 0.4%, at $108.33 a barrel by 0354 GMT, while US West Texas Intermediate crude futures were down 69 cents, or 0.7%, at $103.56 a barrel Dollar. Both contracts on Wednesday shrugged off a massive build in US crude inventories and ended the session up about 4%.

“Demand growth is starting to slow, and the outlook for the second half of the year is looking increasingly bleak,” said Vandana Hari, founder of oil market analysis provider Vanda Insights. However, she said, the oil complex is highly focused on the short-term, and concerns about supply shortages are crowding out that view. About 3 million barrels a day of Russian oil could be shut down from May due to sanctions or a voluntary embargo, the International Energy Agency warned on Wednesday.

Harry said the chances of the EU reaching an agreement on a Russian oil ban were virtually nil, but no one could or would want to say it explicitly. “And, even continued rattling of the sword is enough to maintain a risk premium.”
Meanwhile, major global trading firms are also planning to reduce purchases of crude oil and fuel from Russia’s state-owned oil company in May, Reuters reported on Wednesday.

The US oil inventories rose by more than 9 million barrels last week, in part due to the release of the country’s strategic stockpile, the US Energy Information Administration said on Wednesday, despite signs that global supply disruptions will persist. Analysts polled by Reuters had expected an output of just 863,000 barrels. The US gasoline inventories fell by 3.6 million barrels last week, well above expectations, and distillate inventories also fell. “Oil looks very comfortable above $100 as the US and Chinese demand appear to be heading in the right direction,” wrote OANDA senior analyst Edward Moya.