Crude oil futures shrugged off a barrage of threats and demands between Western powers and Russia over the crisis in Ukraine, slipping ahead of the weekend on profit taking and healthy supplies in North America.
Record-high stockpiles of crude oil in the United States revealed by government data on Wednesday weighed on U.S. benchmark crude futures, which are less susceptible to geopolitical risk and fears of supply squeezes in Europe.
At one point both Brent and U.S. crude were down over a dollar a barrel. In the end, Brent settled at $109.58 a barrel, 75 cents, or 0.68 percent lower, while U.S. crude settled $1.34, or 1.31 percent, lower at $100.60.
U.S. crude oil futures were the first to fall over a dollar, widening the Brent-WTI spread <CL-LCO1=R> to near a key level of $9.35, but Brent prices soon followed lower, narrowing that spread.
The United States, Germany and Britain all indicated they would seek further sanctions against Russia after separatists in Ukraine held on to control of several towns and on Friday detained a bus carrying international observers.
Russia meanwhile warned Kiev it would face justice for a "bloody crime" in eastern Ukraine, where government forces killed five separatists, and told Germany violence by Ukraine's army and "armed radical nationalists" must cease.
"The Ukrainian situation is being overwhelmed by Wednesday's EIA data (on inventories). That was bearish and I think you're still continuing to see the effects of that," said Bob Yawger, director of commodities futures at Mizuho Securities.
The Energy Information Administration data showed not only crude inventories at record highs, but also fresh highs in oil production and a dip in oil demand..
U.S. crude futures have slipped below their 200-day moving average of $100.80 and in the absence of significantly increased geopolitical risk could test the 100-day moving average figure of $99.12 a barrel, analysts said.
Aside from the war of words over Ukraine, there were several other factors that were supportive of Brent but not enough to turn futures positive, analysts said.
"It's the reverse drag where WTI is keeping Brent from extending upside. If it wasn't for the fundamentals of the EIA report, you would see that Brent market extending upwards but it's not happening with all this crude oil sitting here in the biggest consumer of energy products in the world," Yawger said.
In Libya, a rebel group that controls several ports in the east said on Thursday it would not reopen the Ras Lanuf and Es Sider terminals unless the government implemented its part of a deal to end an oil blockade.
A wave of protests at oilfields, ports and pipelines in the OPEC member has cut production to just 220,000 barrels per day (bpd) from 1.4 million bpd in the summer. Rebels in the east and the government agreed over two weeks ago to reopen some ports.
"They have been in talks, but the ground reality is that there has been no pick-up in exports from Libya," a trader with a Western trading house said. "Nobody expected it to be quick, but hopes of a smooth ramp-up in exports are fading."
In the North Sea, meanwhile, about a quarter of production from the 200,000 bpd Buzzard oil field in the North Sea has been cut. Buzzard is Britain's biggest oilfield and the largest single contributor to the Forties stream.
Money managers cut their net long U.S. crude futures and options positions in the week to April 22, the U.S. Commodity Futures Trading Commission said late on Friday.
(By Sabina Zawadzki; Additional reporting by Christopher Johnson in London and Manash Goswami in Singapore; Editing by Jane Baird, David Evans, Meredith Mazzilli and Andre Grenon)