Oil prices levelled off on Wednesday after hitting seven-year highs the day before, as it became evident that the first wave of US and European sanctions against Russia for sending soldiers into eastern Ukraine would not impact oil supplies.
At the same time, the prospect of additional Iranian crude returning to the market, with Tehran and international powers on the verge of resurrecting a nuclear deal, held prices under check.
At 0730 GMT, Brent crude was up 11 cents, or 0.01 percent, to $96.95 a barrel, after reaching a high of $99.50 on Tuesday, the highest since September 2014.
After topping $96 on Tuesday, U.S. West Texas Intermediate (WTI) oil futures were up 6 cents, or 0.07 percent, to $91.97 a barrel.
“As bargaining chips, NATO partners are withholding some harsh steps, implying that the door to diplomacy remains open. Until it isn’t, the Iran nuclear deal is still a possibility “Vandana Hari, the founder of oil market research firm Vanda Insights, agreed.
“For the time being, the two variables will keep crude rangebound and pull Brent back from $100,” Hari added.
Prices rose on Tuesday amid fears that western sanctions against Russia for sending soldiers into two breakaway regions of eastern Ukraine might disrupt energy supply, but the US made it plain that energy exports would be unaffected.
“The sanctions that are being implemented today, as well as others that may be imposed in the near future, do not target and will not target oil and gas flows,” a senior US State Department official said late Tuesday to reporters.
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