New York: Brent and US crude ended lower on Wednesday as hopes that a peace plan from Ukraine’s president-elect might help ease the crisis with Russian separatists cooled oil’s earlier rally.

Rising US distillate stockpiles and weak distillate profit margins in Northwest Europe also helped trigger the reversal by crude futures.

Brent crude for July delivery fell 42 cents to settle at $108.40 (Dh397.82) a barrel. Brent fell as low as $108.27 during the session, before settling back above the 100-day moving average of $100.32.

US July crude dipped 2 cents to settle at $102.64, after rising as high as $103.69 immediately after the release of US oil inventory data that showed crude oil stocks fell last week.

“There was short-covering ahead of the data, but some selling afterward, and the Ukraine news also helped trigger some selling,” said Bill Baruch, senior market strategist at iitrader.com LLC in Chicago.

The US Energy Information Administration (EIA) said US crude stocks fell by 3.4 million barrels last week as imports dropped, a bigger slide than the expected 300,000-barrel draw and also bigger than the inventory drop that was reported by an industry group on Tuesday.

US distillate inventories, including diesel and heating oil, rose 2.01 million barrels, the EIA said, much more than the 400,000-barrel build that had been expected. Gasoline stocks also rose, by 210,000 barrels.

Also weighing on distillate futures, diesel refining margins in Europe have dropped to a four-year low below $10 a barrel, pressured by Russian and US exports.

Peace plan

“US crude’s bullish response to the supportive EIA report proved to be short-lived as heavy product markets ultimately weighed on crude values,” said Jim Ritterbusch, president at Ritterbusch and Associates in Galena, Illinois.

US July heating oil fell 1.77 cents to settle at $2.8481 a gallon after sliding to $2.8470. US July gasoline

fell 1.35 cents to settle at $2.9444 a gallon.

Ukrainian President-elect Petro Poroshenko said it was possible he would meet Russian leader Vladimir Putin at commemorations in France this week marking the anniversary of the Second World War D-Day landings.

Poroshenko said a peace plan he is working on to end violent clashes between separatists and government forces in Ukraine would include decentralisation of power, a wide amnesty, and elections for local government.

Along with the Ukraine crisis, political turmoil in Libya has been underpinning oil prices. Libya’s eastern Hariga oil port remained closed even though protesting security guards have been paid their salaries, state oil firm AGOCO said.

Libya could stop exporting crude within days as the state oil company could be forced to divert the only remaining exports to keep a domestic refinery running.