Oil futures pulled back on Thursday, a day after settling at their highest price in more than two weeks, with world leaders gathering to discuss actions against Russia as its invasion of Ukraine heads into a second month.
May Brent crude
the global benchmark, was down $1.78, or 1.5%, at $119.82 a barrel on ICE Futures Europe. Brent and WTI both gained more than 5% to settle Wednesday at their highest since March 8.
April natural gas
traded at $5.156 per million British thermal units, down 1.5%.
President Joe Biden on Thursday met with leaders of the North Atlantic Treaty Organization in Brussels, the first of a series of meetings with European allies and other world leaders in response to Russia’s Feb. 24 invasion of Ukraine.
The Biden administration announced the rollout of more sanctions against Russia, including measures against 48 large Russian state-owned enterprises that are part of that country’s defense-industrial base and produce weapons that have been used in the invasion.
The U.S. has already banned imports of Russian crude, and the U.K. said it would phase out the import of Russia oil by the end of the year. Europe, meanwhile, has remained divided. Worries over the loss of Russian supply have contributed to market volatility, with crude jumping earlier this month to nearly 14-year highs before dropping sharply back below $100 a barrel and then bouncing higher.
“Many members of the European Union…have continued to show reluctance in targeting much needed Russian energy supplies with more sanctions,” Brian Steinkamp, commodity analyst at Schneider Electric, said in a daily note. Still, “major refiners in Japan have vowed this week to join others world-wide in phasing out oil deals with Russia.”
Analysts said talk of progress around restoring the Iran nuclear deal, which would allow the country to resume crude exports, may have put some pressure on oil early Thursday.
“Where things stand now is we’ve made progress over the course of the past several weeks. There are still some issues left. We’re working on those issues. It’s unclear whether this will come to closure or not,” White House national security adviser Jake Sullivan told reporters en route to Brussels with Biden on Air Force One on Wednesday.
Meanwhile, China continues to deal with the worst COVID-19 outbreak since the pandemic began, with lockdown once again put into effect and “directly impacting industrial demand for petroleum products,” said Steinkamp.
The Energy Information Administration on Thursday reported that domestic natural-gas supplies fell by 51 billion cubic feet for the week ended March 18. That compared with the average weekly decline of 62 billion cubic feet forecast by analysts surveyed by S&P Global Commodity Insights.
On Wednesday, the EIA reported that domestic crude inventories fell by 2.5 million barrels for the week ended March 18. Gasoline and distillate stockpiles also declined.