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Oil futures declined on Friday as investors continued to monitor Russia’s invasion of Ukraine, a day after crude briefly topped the $100-a-barrel threshold for the first time in over seven years.
News reports said Russia was in favor of talks with Ukraine pressured prices, though few details were available and traders remained cautious.
Price action
-
West Texas Intermediate crude for April delivery
CL.1,
-1.27% CLJ22,
-1.27%
fell 65 cents, or 0.7%, to $92.16 a barrel on the New York Mercantile Exchange. The U.S. benchmark on Thursday hit an intraday high of $100.54. It trades about 2% higher for the week. -
April Brent crude
BRNJ22,
-1.97% ,
the global benchmark, was down $1.44, or 1.5%, at $97.64 a barrel on ICE Futures Europe. The contract, which trading as high as $105.79 on Thursday, is up over 4% for the week. The more actively traded May contract
BRN00,
-1.60% BRNK22,
-1.60%
fell $1.05, or 1.1%, to $94.37 a barrel. -
March gasoline
RBH22,
-1.73%
fell 1.4% to $2.732 a gallon and March heating oil
HOH22,
-2.10%
lost 1.8% to $2.845 a gallon. The contracts, which expire at the end of Monday’s session, eye a weekly gain of over 2%.
Market drivers
Crude drifted lower after news reports, citing a summary of a call between Russian President Vladimir Putin and Chinese leader Xi Jinping provided by China’s Foreign Ministry, said Russia was ready to conduct negotiations with Ukraine.
On Thursday, oil ended with gains but well off session highs above $100 a barrel, with the pullback tied by analysts to relief that a new round of sanctions announced by the U.S. and its allies against Moscow didn’t target Russia’s energy exports or cut the country off from the SWIFT payment system.
“This means that energy imports from Russia can still be paid for. The question now is how Russia will respond to the sanctions that have been decided, which will hit the banking sector and the technology industry hardest of all,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note.
Read: Why Russia’s invasion of Ukraine could lift oil prices to a 14-year high
If Russia reacts by cutting back energy shipments, prices are likely to rise sharply again, he said, which also puts a focus on talks aimed at restoring Iran to the international nuclear accord, he said. “If U.S. sanctions on Iran were to be lifted, Iran would be able very quickly to place an additional 1.5 million to 2 million barrels of crude oil per day on the market,” he said.
Read: Potential for an Iran nuclear deal keeps oil rally in check
Meanwhile, the Organization of the Petroleum Exporting Countries and their allies will meet Wednesday to decide on production levels for April.
