Oil futures prices drop amid Ukraine reports

Oil extended its retreat from a seven-year high, falling back below $100 a barrel on Friday as Russia’s invasion of Ukraine forced traders to contend with a fluid market environment.

Futures in New York traded just below $92 a barrel after surging to $100 on Thursday as Russia launched an attack on its neighbor. Prices then retreated in Thursday afternoon’s session as Western governments said they would not impose sanctions on energy exports. The pushback continued on Friday amid reports that President Vladimir Putin was ready to send a delegation to Minsk for peace talks with Ukraine.

“It seems that the United States and its allies want to inflict pain on Russia, but do not want to hinder its ability to supply energy products to the world,” said Bart Melek, head of commodities strategy at Securities Securities. TD.

Yet buyers like China briefly suspended purchases of Russia’s flagship quality, the Urals, fearing the breakdown in international relations could further complicate relations with Moscow.

The United States imposed its toughest sanctions on Russia as tanks and troops closed in on the Ukrainian capital, but said restrictions on currency clearing would include exclusions for energy payments, a source of income crucial for Moscow.

President Joe Biden has said Russia will not be kicked out of the Swift International Banking Network because Europe opposed the action. Despite this, some European lenders are reducing their exposure to Ukraine and Russia, threatening trade-critical credit lines.

“Even if the sanctions don’t explicitly hit Russian energy exports, we’re still likely to see a reduction in energy flows from Russia,” said Bjarne Schieldrop, chief commodities analyst at SEB.

West Texas Intermediate for April fell 1.3% to $91.59 on Friday afternoon in New York. Brent for April settlement fell 1.2% to $97.93.

Russia’s invasion of Ukraine spooked a global oil market that was already dangerously stretched due to the inability of supply to keep up with the post-pandemic recovery in demand. Biden said the United States was working with other major consumer nations on a coordinated release of reserves. Such sales would have to be very large to have a major impact on prices.

Japan and Australia have indicated they could be part of an international statement, but China has said it has no immediate plans to intervene in oil markets. A Beijing spokesman said he would only consider such a move when the geopolitical situation stabilized. South Korea said it was preparing to take action in the event of an interruption in energy deliveries.

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