Oil edges higher as new Russia sanctions outweigh demand worries

Oil pours out of a spout from Edwin Drake’s original 1859 well that launched the modern petroleum industry at the Drake Well Museum and Park in Titusville, Pennsylvania U.S., October 5, 2017. (Reuters)

SULAIMANI (ESTA) — Oil prices rose on Wednesday, as the threat of new sanctions on Russia raised supply concerns.

Brent crude futures were up $1.17 at $107.8 a barrel as of 0818 GMT, having fallen to $105.06 earlier in the session.

U.S. West Texas Intermediate futures climbed $1.02 to $103 a barrel, after dipping to as low as $100.37 in an early trade.

The United States and its allies on Wednesday prepared new sanctions on Moscow over civilian killings in northern Ukraine, which President Volodymyr Zelenskiy described as “war crimes” demanding commensurate punishment. Russia denied targeting civilians, according to Reuters.

“Concerns grew again over supply tightness as United States and Europe are stepping up sanctions on Russia,” Reuters quoted Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd as saying.

Proposed EU sanctions, which the bloc’s 27 member states must approve, would ban buying Russian coal and prevent Russian ships from entering EU ports, Reuters reported.

Britain also urged G7 and NATO nations to agree a timetable to phase out oil and gas imports from Russia.

The growing supply concerns erased earlier price falls due to a stronger dollar, which makes oil more expensive for holders of other currencies, and a surprise build in U.S. crude stockpiles.

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