Oil futures edged lower Wednesday, after sanctions against Russia were seen doing little to crimp supplies of crude.
Price action
-
West Texas Intermediate crude for April delivery
CL.1,
-0.74% CLJ22,
-0.26%
fell 30 cents, or 0.3%, to $91.61 a barrel on the New York Mercantile Exchange. -
April Brent crude
BRNJ22,
-0.17%
the global benchmark, was down 20 cents, or 0.2%, at $96.64 a barrel on ICE Futures Europe a day after logging the highest finish for a front-month contract since Sept. 29. 2014. -
March natural-gas futures
NGH22,
+0.93%
rose 0.6% to $4.525 per million British thermal units.
Market drivers
Crude was lifted Tuesday as investors reacted to Russian President Vladimir Putin’s decision to deploy troops to separatist regions of Ukraine, fanning fears of a full-scale invasion and prompting the announcement of sanctions by the U.S. and its allies against Moscow.
But analysts said the measures announced, and remarks by Biden administration officials, have lowered concerns about sanctions affecting the flow of crude oil.
“The sanctions announced so far have underwhelmed commodity markets. As a result, oil failed to break this key level and instead gave back a lot of its recent gains,” said Warren Patterson, head of commodities strategy at ING, in a note.
President Joe Biden on Tuesday said the U.S. was sanctioning two Russian banks as well as the country’s sovereign debt, as he blamed Moscow for what he called the beginning of an invasion of Ukraine. Germany halted the certification of the Nord Stream 2 pipeline, which was slated to boost flows of natural gas from Russia to Western Europe.
According to news reports, a senior State Department official said the sanctions announced Tuesday and in the near future wouldn’t target oil and gas flows.
“Sanctions announced up until now should not have much impact on Russian oil exports,” Patterson said. “Local banks which are heavily involved within the commodities industry have been left untouched.”
