Worries over Russia's intentions toward Ukraine were revived when NATO's top commander, General Philip Breedlove, warned that Russian troops massed on Ukraine's border could be mobilized to attack with just 12 hours notice and could sweep vast portions of Ukrainian territory in three to five days.
NATO Secretary General Anders Fogh Rasmussen called the buildup of an estimated 40,000 troops on the border "a matter of grave concern."
Any conflict, traders worry, could disrupt key fuels trade between Russia and the West and send oil and gas prices skyrocketing.
Meanwhile, the US Energy Information Administration said American crude inventories slid 2.4 million barrels in the week to March 28.
That confounded market expectations for a gain of 700,000 barrels. It suggested higher demand, though the figures may have been distorted by a transport bottleneck after an oil spill shut down a key Texas coast channel last week.
On the other hand, selling pressure was evident early in the day, helped by weak Chinese economic data and reports that Libya may be close to reaching a deal with rebels who have blockaded oil terminals since July.