(This May 2 story corrects U.S. official’s quote to say annual cap is 500,000 barrels, not 500, in paragraph 3 and to say Ukraine, not North Korea, in paragraph 8)

By Steve Holland

WASHINGTON (Reuters) – Russia has been quietly shipping refined petroleum to North Korea at levels that appear to violate the mandates of the United Nations Security Council, a U.S. official said on Thursday, adding the U.S. is planning new sanctions in response.

The disclosure came on the first day after a U.N. panel of experts monitoring enforcement of longstanding U.N. sanctions against North Korea for its nuclear weapons and missile programs was disbanded after a Russian veto.

“At the same time that Moscow vetoed the panel’s mandate renewal, Russia has been shipping refined petroleum from Port Vostochny to the DPRK (North Korea). Russian shipments have already pushed DPRK imports above the 500,000-barrel annual cap mandated by the U.N. Security Council,” the U.S. official told Reuters, speaking on condition of anonymity.

The official said that in March alone, Russia shipped more than 165,000 barrels of refined petroleum to North Korea and that given the close proximity of Russian and North Korean commercial ports, Russia could sustain these shipments indefinitely.

Russia blocked the annual renewal of the panel in late March in what the U.S. official described as a calculated move by Moscow to hide its own violations of UN Security Council resolutions.

The official said the United States will continue to impose sanctions “against those working to facilitate arms and refined petroleum transfers between Russia and the DPRK.”

“We have previously worked to coordinate autonomous sanctions designations with our partners — including Australia, the European Union, Japan, New Zealand, the Republic of Korea, and the United Kingdom — and we will continue to do so,” the official said.

North Korea has been helping Russia in its war against Ukraine by supplying ballistic missiles.

By Shariq Khan

NEW YORK (Reuters) -Oil prices closed slightly lower on Tuesday on signs of easing supply concerns, while market participants shifted their focus to U.S. stockpiles data due later today and Wednesday.

futures settled 17 cents lower at $83.16 a barrel, and U.S. West Texas Intermediate crude futures closed 10 cents lower at $78.38.

Prices fell further in thin post-settlement trading after market sources said that data from the American Petroleum Institute showed a jump in and fuel stocks last week. Rising inventories, typically a sign of weak demand, have defied analysts’ expectations in recent weeks.

Analysts polled by Reuters forecast a decrease in U.S. oil and fuel stockpiles, and official data from the U.S. Energy Information Administration (EIA) is due at 10:30 a.m. ET (1430 GMT) on Wednesday. [API/S] [EIA/S]

Brent crude futures traded at $82.98 a barrel by 4:48 p.m. ET, 35 cents lower than Monday’s closing price, and WTI futures were down 23 cents to $78.26 a barrel. U.S. gasoline futures and ultra-low sulfur diesel futures also fell in extended trading.

“If EIA shows less barrels are going into the refineries, then that is a problem for crude oil here,” Mizuho analyst Robert Yawger said. “Heading into peak summer driving season we should be drawing, not building,” he added.

Current global inventory data shows crude oil and petroleum supplies are running 1.1 million barrel per day above forecasts in developed economies, according to an analysis by energy brokerage StoneX.

“Global inventories remain in a building phase and has accelerated recently,” StoneX analyst Alex Hodes wrote to clients on Tuesday.

The EIA on Tuesday raised its forecasts for this year’s world oil and liquid fuels output and lowered its demand expectations, pointing to a well-supplied market as opposed to prior forecasts that showed under-supply.

The premium of the first-month Brent contract to the six-month contract slipped to $2.90 a barrel on Tuesday, the lowest since mid-February, another sign of market participants betting on easing supply tightness.

Last week, Brent and WTI had their steepest weekly losses in three months as weak U.S. jobs data fueled hopes for interest rate cuts.

Oil prices found some support in Tuesday’s session from a U.S. government solicitation to buy more than 3 million barrels of oil for the Strategic Petroleum Reserve (SPR).

Oil traders largely looked past escalating tensions in the Middle East, where the Israeli military seized control of the Rafah border crossing between the Gaza Strip and Egypt and its tanks pushed into the southern Gazan town of Rafah, as mediators struggled to secure a ceasefire agreement.

“Instead, their focus appears directed towards the uncertainties surrounding global economic growth prospects and the anticipated impact of sluggish growth on oil demand,” said Ricardo Evangelista, senior analyst at financial brokerage ActivTrades.

Investing.co — Oil prices fell Wednesday as industry data pointed to a sustained increase in U.S. inventories, implying demand from the world’s largest consumer is coming under pressure.

At 08:35 ET (12:35 GMT),  fell 1.2% to $82.12 a barrel, while fell 1.3% to $77.37 a barrel.

US oil inventories clock unexpected build – API

Data from the showed that U.S. oil inventories grew 0.5 million barrels in the week to May 3, confounding expectations for a draw of 1.4 million barrels.

“API numbers released overnight were moderately bearish due to stock builds in both crude and products,” analysts at ING said, in a note.

“While US crude oil inventories are estimated to have increased by only 500k barrels over the week, gasoline and distillate stocks increased by 1.5m barrels and 1.7m barrels respectively.  In addition, stocks at the WTI delivery hub, Cushing, grew by  1.3m barrels over the week.”

The data comes after U.S. inventories saw an unexpected, outsized build in the prior week, which spurred speculation that global oil markets were not as tight as initially expected.

The API data usually heralds a similar reading from , which is due later on Wednesday.

Strong U.S. supplies have undermined expectations of tighter global oil markets, especially as recent data also showed U.S. oil production raced back to record highs in February. 

OPEC+ to roll over supply output cuts? 

Cautious expectations on supply cuts from the Organization of the Petroleum Exporting Countries and its allies ahead of a June 1 policy meeting also weighed on markets.

Russian Deputy Prime Minister Alexander Novak said on Tuesday that there had been no discussions about an oil output increase by OPEC+, a day after he was reported saying the group had the option of increasing production.

“Our oil balance suggests that there is no need for a full rollover of the 2.2m b/d of cuts. Instead, a partial rollover should be enough to keep the market balanced for the remainder of the year,” ING added. “However, recent price action increases the risk that full cuts are rolled over, which in turn increases the risk of OPEC+ overtightening the oil market later in the year.”

Middle East tensions persist, Israel-Hamas ceasefire uncertain 

Israel kept up its offensive against Rafah on Tuesday, while also seizing a key main border crossing in the city. 

The move came even as Hamas officials reportedly accepted a new ceasefire proposal for Gaza – one that Israel rejected. Hamas also expressed ire over Israel’s attacks on Rafah, and that the strikes largely undermined any progress towards a truce.

Still, U.S. officials said a ceasefire could still be reached, as delegates from both sides met in Cairo for negotiations.

The prospect of continued geopolitical unrest in the Middle East presented some support to oil prices, amid bets that the unrest will disrupt supplies in the oil-rich region.

(Ambar Warrick contributed to this article.)