By Barani Krishnan
NEW YORK (Reuters) - Benchmark Brent crude prices fell on Monday pressured by European Central Bank bond-buying, while U.S. crude rose on bullish storage data, leading to a narrowing gap between the two benchmarks.
The Brent and U.S. crude differential (CL-LCO1=R), one of the biggest plays in oil, narrowed to less than $9 a barrel, tripping up some traders who had bet the spread would expand this week after a recent 13-month high above $13.
Brent was pressured as the ECB started buying bonds under its quantitative easing program, a move that implies a certain level of deflation, said Bob Yawger at Mizuho Securities in New York.
U.S. crude was lifted after data from energy information provider Genscape suggested a smaller inventory build last week, compared with the previous week, at the oil hub at Cushing, Oklahoma.
Genscape estimated a 157,000-barrel rise in Cushing last week, versus 536,000 barrels noted by the Energy Information Administration during the week ended Feb. 27.
"The perception is that the number will be smaller than it has been in the last week, and several weeks before that, particularly the number at Cushing won't be one of these mega-builds," Yawger said.
Brent (LCOc1) was down $1.17, or more than 1 percent, at $58.56 a barrel at 2:21 p.m. EDT (1821 GMT).
U.S. crude (CLc1) was up 50 cents, or about 1 percent, at $50.11.
Traders said a U.S. executive order against OPEC member Venezuela and sanctions against certain individuals in that country had a negative effect on the market, although a senior Obama administration official said the order does not target the Venezuelan oil industry.
The order signed by President Barack Obama declared Venezuela a national security threat, sanctioning seven individuals and expressing concern about the treatment of political opponents by the government of the South American nation.
A senior U.S. administration said the actions will have no direct impact on Venezuela's energy sector.
U.S. crude imports from Venezuela have averaged 728,000 barrels per day since the start of last year, down from 738,000 bpd in 2013 and 890,000 bpd in 2012.
"On the face of it, this executive order should have been bullish if anything to oil, if it impedes oil moving of Venezuela in any way," said Phil Flynn, analyst at Price Futures Group in Chicago.
"But Venezuela is such a basket case that people tend to worry about so many other things concerning that country, and that's possibly what caused the market to go down."
(Additional reporting by Christopher Johnson in London and Keith Wallis in Singapore; Editing by Jason Neely, William Hardy, David Evans, Tom Brown and Peter Galloway)