Oil falls as investors weigh U.S. import ban


Oil slipped towards $125 a barrel in volatile trading on Wednesday as investors assessed the U.S. ban of Russian oil imports and Russia announced a new ceasefire in Ukraine on Wednesday to let civilians flee.

A view that the U.S. ban of Russian oil imports may not worsen shortages kept a lid on prices, traders said, as did talk that Ukraine was no longer seeking NATO membership after some news reports this week on the issue.

Brent crude fell $2.27, or 1.8%, to $125.71 a barrel after earlier rising above $131. U.S. West Texas Intermediate (WTI) fell $3.19, to $120.51.

Oil also fell as the head of the International Energy Agency described the agency’s decision last week to release 60 million barrels of oil reserves to compensate for supply disruptions following Russia’s invasion as “an initial response” and that more could be released if needed.

Oil has surged since Russia, the world’s second-largest crude exporter, launched what it called a “special operation” in Ukraine. Brent hit $139 on Monday, its highest since 2008.

On Wednesday, Russia announced a new ceasefire in Ukraine to let civilians flee besieged cities, after days of mostly failed promises that have left hundreds of thousands of Ukrainians trapped without access to medicine or fresh water.

In addition to the U.S. decision, Britain also said on Tuesday it would phase Russian imports out and Shell said it would stop buying Russian crude. JP Morgan estimated around 70% of Russian seaborne oil was struggling to find buyers.

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