U.S. crude falls by more than $1, shrugs off sanctions

By Elizabeth Dilts

NEW YORK (Reuters) - U.S. crude oil futures tumbled over $1 on Thursday as builds in domestic stockpiles and a strong U.S. dollar outweighed worries over the possible impact of tougher U.S. sanctions on Russia.

In the latest sign of mounting tensions over Moscow's annexation of Crimea, the U.S. expanded its sanctions to 20 more prominent Russians, including allies of Russian President Vladimir Putin. Russia retaliated with its own sanctions against 9 U.S. officials and lawmakers.

Comments from U.S. Federal Reserve Chair Janet Yellen on Wednesday indicated the U.S. central bank could end its stimulus program this autumn and then might raise interest rates sooner than expected, sending the U.S. dollar higher against other major currencies.

This pressured oil and commodities priced in the dollar.

Gasoline inventories at Europe's Amsterdam-Rotterdam-Antwerp (ARA) storage hub rose near-six-year highs last week indicating ample supply and exacerbating data from the U.S. that showed domestic crude inventories rose sharply for a second week in a row.

"There is selling pressure in U.S. crude from the stronger dollar, the widening spread and two consecutive weeks of putting 5 million barrels of crude back into stockpiles," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

U.S. crude for April delivery, which will expire at the settlement on Thursday, fell 72 cents to $99.65 per barrel by 12:49 p.m. EDT (1649 GMT). The contract fell $1.29 to an intra-session low of $99.08.

U.S. Crude for May delivery fell 36 cents to 98.81 per barrel.

Brent rose 53 cents to $106.38 a barrel.

Economic data out of the U.S. was mixed with initial state jobless claims rising 5,000 last week while factory activity in the Mid-Atlantic region accelerated in March.

Societe Generale cut its 2014 price forecast for crude oil on Wednesday, saying prices have underperformed despite strong fundamentals.

Societe Generale reduced price targets for Brent to $106 per barrel from $108 and for U.S. crude to $96 per barrel from $99.

(Additional reporting by Peg Mackey and Shadi Bushra in London, and Jacob Gronholt-Pedersen in Singapore; Editing by Dale Hudson, William Hardy and Chris Reese)