Crude prices mixed in Asia after ECB rate cuts

Singapore, June 6: Oil prices were mixed in Asian trade today after the European Central Bank (ECB) announced an unprecedented cut in interest rates, while tensions between Ukraine and Russia look to be easing.

US benchmark, West Texas Intermediate (WTI) for delivery in July eased one cent to USD 102.47 a barrel while Brent North Sea crude for July was up 10 cents at USD 108.89.

"With geopolitical tensions out of the way and the dollar fluctuating less, it's not surprising that crude has come off," Kelly Teoh, managing director at IR Resources in Bangkok told AFP. "Europe's better-than-expected economic data and the interest rate cut means Brent will hold up," Teoh said.

The ECB on Thursday slashed its deposit rate to -0.10 per cent. This means banks will be charged for leaving funds at the ECB in the hope they might lend it on to businesses and consumers instead.

It also cut its lending rate to a record low of 0.15 per cent from 0.25 percent and said hundreds of billions of euros would be made available in cheap loans to banks as long as they lent more to the private sector.

Russian President Vladimir Putin returned to the international centre stage yesterday after being granted his first meetings with Western leaders since the eruption of the Ukraine crisis.

The meeting comes as he says he is ready to meet Ukraine's newly elected president Petro Poroshenko, raising hopes of an easing in the worst East-West standoff since the Cold War. Investors fear a full-blown conflict in the ex-Soviet state, a conduit for a quarter of European gas imports from Russia, will disrupt supplies and send energy prices soaring.

AFP