Benchmark West Texas Intermediate crude for May delivery closed at US$103.76 a barrel on the New York Mercantile Exchange. Brent crude for June delivery, a benchmark for international varieties, closed at US$109.36 in London. The May contract expired Tuesday at US$108.74 a barrel.
U.S. oil rose to nearly $105 per barrel in morning trading, but fell after the Energy Department's weekly supply report showed an increase of 10 million barrels, the largest in 13 years, on higher domestic production and imports.
More concerns about the Russian response to the upheaval in the Ukraine cushioned the price drop. Traders worry that Moscow's actions could be met with western sanctions that disrupt exports of the country's oil and gas.
Officials from the U.S., Russia, Ukraine and the European Union are set to meet in Geneva on Thursday for negotiations aimed at persuading Russia to back off in Ukraine following its annexation of Crimea.
"The increasing tensions between the West and Russia over Ukraine could provide further upside momentum to the oil market, supporting crude oil prices higher," said Myrto Sokou of Sucden Financial Research in London.
In other energy futures trading in New York, wholesale gasoline fell 0.1 cent to close at US$3.041 a U.S. gallon (3.79 litres), heating oil gained 2.4 cents to close at US$3.011 a gallon and natural gas fell 3.7 cents to close at US$4.530 per 1,000 cubic feet.
(TSX:ECA), (TSX:IMO), (TSX:SU), (TSX:HSE), (NYSE:BP), (NYSE:COP), (NYSE:XOM), (NYSE:CVX), (TSX:CNQ), (TSX:TLM), (TSX:COS), (TSX:CVE)