By Cassie Werber
LONDON--European and U.S. benchmark crude oil prices headed in
different directions Wednesday, as they reacted to the new round of
sanctions on Russia.
The U.S. government followed the EU yesterday, expanding
sanctions on Russia to include the energy, finance and defense
sectors.
In Europe, traders saw little threat to supplies from Russia,
which needs the money from oil sales, and Brent prices fell. ICE
September crude was down 0.21% at $107.49 a barrel.
In the U.S., however, WTI traders focused on low stocks at the
major storage point in Cushing, Oklahoma, said David Hufton of
brokerage PVM. WTI crude on the Nymex exchange was up 0.33% at
$101.30 a barrel Wednesday morning.
"The fact is we have two crude price markers, sometimes
responding to the same factors and at other times to factors local
to themselves," said Mr. Hufton.
Brent has continued to suffer withdrawal because threats to
Russian and Iraqi supplies are growing more distant, and on the
prospect of additional Libyan and Nigerian supplies, he said.
Commerzbank analysts said Brent's reaction was muted because the
market isn't concerned about supply. "There is very little chance
of Russia responding to the West's sanctions by curbing its oil
shipments, since the country is too heavily reliant on the revenues
generated by the oil export business," they wrote in a note to
clients.
But a longer-term perspective may provide a different picture.
"In the medium to long term, however, the oil supply from Russia
could decline on the back of lacking investment, which would
probably result in rising oil prices," they said.
The differing reactions mean that the "spread," or price
difference between the two benchmark crudes, is the widest in
almost a month.
Recently the ICE's gas oil contract for August delivery was up
50 cents at $894.50 a metric ton, while Nymex gasoline for
September delivery was down 30 points at $2.8422 a gallon.
Write to Cassie Werber at cassie.werber@wsj.com
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