Oil prices fell in early Asian trade on Thursday after rising more than 5% in the previous session following new Russian sanctions on some European gas companies.
Russia on Wednesday approved 31 companies from countries that have imposed sanctions on Moscow since invading Ukraine in February.
This created market discomfort at a time when Russian gas flows to Europe via Ukraine have dropped by a quarter. This is the first time since the invasion that exports to Ukraine have been disrupted.
Brent crude futures fell 9 cents to 7 107.42 a barrel in 0013 GMT. WTI crude futures fell 13 cents to 5 105.58 a barrel.
Prices have risen more than 35% so far this year due to supply concerns following Russia’s invasion of Ukraine in February.
The European Union is still pushing for a ban on Russian oil, which analysts say will strengthen the market and change trade flows. The vote requires unanimous support, but it has been delayed by digging its heels in the Hungarian opposition.
In China, price increases have been limited by concerns over demand crunch, as it seeks to spread the coronavirus.
“Unless we see that some important policy support is coming to China or that policymakers are adopting an alternative strategy to COVID (which seems highly unlikely), oil prices could remain in the near term." Says Stephen Innes, managing partner at SPI Asset Management.