November 12, 2014 / 1:13 AM / in 4 years

NYMEX-U.S. crude drops, but holds above $77 as Mideast tensions support

SINGAPORE Nov 12 (Reuters) - U.S. crude futures fell on Wednesday as the dollar held close to a seven-year high, but tensions in Ukraine and the Middle East helped keep prices for the commodity above $77 per barrel.

FUNDAMENTALS

* U.S. crude for December delivery had dropped 54 cents to $77.40 a barrel by 0109 GMT, after closing 54 cents higher the session before.

* Brent crude dropped 49 cents to $81.18 a barrel after closing 67 cents lower at $81.67 a barrel. It hit its lowest since September 2010 at $80.46 in the previous session.

* U.S. commercial crude oil stocks grew 800,000 barrels to around 381 million barrels in the week ended Nov. 7, an analyst poll by Reuters showed on Tuesday.

* The survey was taken ahead of weekly inventory reports from industry group the American Petroleum Institute (API) and the U.S. Department of Energy’s Energy Information Administration (EIA), which have been delayed by a day due to a public holiday.

* U.S. stocks of distillates, including heating oil and diesel fuel, were seen down 1.3 million barrels at 118.4 million barrels, the poll showed.

* OPEC could agree to cut oil production by 500,000 barrels a day at its meeting on Nov. 27 in Vienna.

* European Union foreign ministers will meet next week to discuss the possibility of more sanctions on Russia over the conflict in Ukraine, the EU foreign affairs chief said.

* Heavy shelling resumed around the pro-Russian separatist stronghold of Donetsk in eastern Ukraine on Tuesday, as Kiev said rebels, supported by “Russian mercenaries”, had been rearmed, moves that strained a two-month old ceasefire.

* Talks are ongoing between protesters and oil executives to resolve a dispute over unpaid wages which has blocked exports from Libya’s 120,000-barrel-per-day Hariga port, an oil official said.

* Senior officials from Western powers and Iran held a day of talks in Oman on Tuesday over Tehran’s nuclear programme that followed two days of discussions which finished Monday but with no imminent breakthrough of an agreement in sight.

MARKETS NEWS

* The yen flirted with a seven-year low against the dollar early on Wednesday on reports that Prime Minister Shinzo Abe will call a general election in December.

DATA/EVENTS

* The following data is expected on Wednesday:

- 0700 GMT Germany Wholesale price index Oct

- 1000 GMT Euro zone Industrial production Sep

- 1500 GMT U.S. Wholesale inventories Sep (Reporting by Keith Wallis; Editing by Joseph Radford)

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