Oil prices in slight retreat

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Oil prices fell slightly on Tuesday as traders weighed ample supplies against data pointing to solid demand from the world's biggest energy consuming nations, analysts said.

US benchmark, West Texas Intermediate (WTI) for delivery in July dipped six cents to $102.41 a barrel.

Brent North Sea crude for July dropped 27 cents to stand at $108.56 a barrel in midday deals compared with Monday's closing level.

"The losses in Brent crude could be attributed to an ample supply as OPEC's output forecast remains high,? said Dorian Lucas, an analyst at energy consultancy Inenco.

Crude futures remained supported however by positive US and Chinese manufacturing data.

"The oil market at the moment is focused on the manufacturing data out of the US and China," Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP.

"But we are seeing some of the risk premium associated with Ukraine coming off as the crisis continues to drag on with new developments having little impact," McCarthy said. "That is dampening any upside factor on oil."

Government forces and pro-Russian insurgents have been embroiled in skirmishes for weeks in eastern Ukraine, but the fighting has so far not expanded into a full-fledged civil war in the ex-Soviet state.

The West has accused Russia of fomenting unrest in its neighbour since the ousting of pro-Kremlin (Berlin: KMLK.BE - news) president Viktor Yanukovych in February. Moscow denies the allegation.

Investors are concerned that a full-blown conflict in Ukraine, a conduit for a quarter of European gas imports from Russia, would disrupt supplies and send energy prices soaring.

The International Energy Agency said that more than $48 trillion (35 trillion euros) must be invested by 2035 to meet global energy needs as current technologies go offline and demand rises in emerging nations.

In a report launched in London on Tuesday, the IEA said the expansion of the global gas market, thanks largely to the improvements in unconventional extraction methods, will not reduce prices significantly owing to high transportation and infrastructure costs.

The Paris-based body forecast that $2 trillion per year will need to be invested by 2035, a rise of $400 billion from 2013.