US oil eases on profit-taking after rally on Mideast risks

Heightening geopolitical tensions in the Middle East with Turkey's downing of a Russian warplane affected prices

US crude oil futures dipped on Wednesday on profit-taking after the prices rallied to a two-week high on the previous session due to heightening geopolitical tensions in the Middle East with Turkey's downing of a Russian warplane.

US crude's West Texas Intermediate (WTI) futures shed 16 cents or 0.37% at $42.71 a barrel as of 0054GMT. It finished the previous session up $1.12, or 2.7%, at $42.87 after hitting $43.46 earlier, its highest since November 11.

Brent settled up $1.29, or 2.9%, at $46.12 a barrel, after hitting a two-week high at $46.50.

Turkey shot down a Russian warplane near the Syrian border on Tuesday, saying the jet had violated its air space. Russian President Vladimir Putin said the plane warned of "serious consequences" for what he termed a stab in the back administered by "the accomplices of terrorists".

US President Barack Obama and French President Francois Hollande pressed Russia on Tuesday to focus its attacks in Syria on Islamic State (IS) militants.

The United States and France separately agreed on Tuesday to ramp up military operations against IS in Syria and Iraq and coordinate intelligence on domestic threats following the worst attacks to hit France since World War II.

Regarding the US crude oil inventories, industry group the American Petroleum Institute data showed on Tuesday that the inventories rose by 2.6 million barrels in the week to November 20 to 488.3 million, compared with analysts' expectations for an increase of 1.2 million barrels.

Asian stocks were mixed in early trading on Wednesday. The US dollar was lower, hurt in part as the latest flare up in geopolitical tensions generated demand for safe haven Treasuries and drove their yields lower. The dollar index retreated from an 8-month peak of 100.000 set on Monday.