Oil prices slip awaiting Russia sanctions

24th July 2014, Comments 0 comments

Oil prices turned lower on Thursday as the market took their leads from geopolitical tensions affecting key crude producing regions Russia and the Middle East.

Brent North Sea crude for delivery in September dropped 25 cents to stand at $107.78 in London midday deals.

US benchmark West Texas Intermediate for September fell 32 cents to $102.80 a barrel.

"The market should continue to monitor geopolitical headlines," said Andrey Kryuchenkov, analyst at financial group VTB Capital.

"We do not expect sustained (price) gains unless reports emerge of actual supply-side disruptions. The market is comfortably supplied with seasonal demand in Europe still slackening," he added.

Investors and traders were following decisions by the European Union, which may go even further than the United States in hitting Russian banks with sanctions over the Ukraine crisis, curbing their ability to raise fresh funds, reports said on Thursday.

As member state ambassadors to the EU began a meeting to review the next step, the Financial Times said they would look at proposals to ban Russian banks from selling new shares on European markets.

Russia is the world's second-biggest oil producer and there are concerns that tougher sanctions could affect Russian supplies. Ukraine is also a major conduit for Russian gas exports to Europe.

Regarding the crude-rich Middle East, US Secretary of State John Kerry has pressed for a Gaza ceasefire.

Seven Palestinians were killed on Thursday in a series of Israeli air strikes and tank fire in a flashpoint area near Khan Yunis in southern Gaza, the emergency services said.

Oil prices had risen on Wednesday after the United States reported a large decline in its crude inventories, indicating strong demand in the world's biggest consumer of crude.

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© 2014 AFP

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