Oil falls on dwindling supply worries about Ukraine crisis According to Reuters

© Reuters. FILE PHOTO: The sun is seen behind a crude oil pump in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. REUTERS/Angus Mordant

By Sonali Paul and Mohi Narayan

NEW DELHI (Reuters) – Oil prices fell slightly on Wednesday after surging to a seven-year high in the previous session as it became apparent the first wave of US and European sanctions against Russia for sending troops into the region. Eastern Ukraine will not disrupt oil supplies.

At the same time, the potential for more Iranian crude to return to the market, with Tehran and world powers about to revive a nuclear deal, also capped oil prices.

rose 30 cents, or 0.3%, to $97.14 a barrel by 0442 GMT, after soaring to $99.50 on Tuesday, its highest level since September 2014.

US West Texas Intermediate (WTI) crude oil futures also rose 30 cents, or 0.3%, to $92.21 a barrel, after touching $96 on Tuesday.

“NATO allies are holding back some sanctions as bargaining chips, which also means the door to diplomacy remains open,” said Vandana Hari, founder of oil market analysis firm Vanda. Iran nuclear deal remains a possibility until it doesn’t happen” NASDAQ 🙂 Details.

“These two factors will keep crude oil in range and keep Brent prices back from $100 for the time being,” Hari added.

Prices rose on Tuesday on concerns that Western sanctions against Russia for sending troops into two breakaway regions in eastern Ukraine could affect energy supplies, but the United States made it clear it would not. impact on energy exports.

A senior State Department official told reporters late on Tuesday that “sanctions that are being applied today and may be imposed in the near future do not target the oil and gas.

Sanctions imposed by the United States, European Union, Britain, Australia, Canada and Japan on Tuesday focused on Russian banks and elites while Germany halted a major gas pipeline project from Russia in response to one of the worst security crises in Europe in decades. .

Further falling prices are the possibility that Iran will return more than 1 million bpd of oil, as diplomats say Iran and world powers are on track to reach a deal to limit Tehran’s nuclear program.

The big unknown is how quickly Iran can actually boost its exports, said Commonwealth Bank commodities analyst Vivek Dhar.

Other members of the Organization of the Petroleum Exporting Countries and their allies, collectively known as OPEC+, have struggled to meet production targets due to poor investment in oil infrastructure and Iran could face the same problem, he said.

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