Oil News: Oil eases after surging in previous Russia sanctions session

Oil prices eased at the start of Asian trading on Thursday, pausing after rising more than 5% in the previous session following new Russian sanctions against some European gas companies.

On Wednesday, Russia sanctioned 31 companies based in countries that imposed sanctions on Moscow after Russia invaded Ukraine in February.

This created unease in the market even as Russian gas flows to Europe via Ukraine fell by a quarter. It was the first time that exports through Ukraine had been halted since the invasion.

Brent crude futures fell 9 cents to $107.42 a barrel at 0013 GMT. WTI crude futures fell 13 cents to $105.58 a barrel.

Prices have risen more than 35% so far this year, boosted by supply problems after Russia invaded Ukraine in February.

The European Union is still negotiating an embargo on Russian oil, which analysts say would further tighten the market and alter trade flows. The vote needs unanimous support, but it has been delayed as Hungary has sunk into opposition.

Price gains were limited by concerns over demand destruction in China as it tries to curb the spread of the coronavirus.

“Until we see significant political support arriving in China or policymakers adopt an alternative strategy to COVID (which seems very unlikely), oil prices could remain capped in the near term,” Stephen said. Innes, managing partner at SPI Asset Management.

Steve R. Hansen