By Barani Krishnan
Investing.com -- Oil prices managed to stay on the positive side of $90 plus a barrel on Wednesday as traders kept a close look out for sanctions that could directly hit Russia’s crude exports.
Global crude benchmark Brent came within 50 cents of hitting the long-awaited $100-a-barrel mark on Tuesday in anticipation of all-out fighting by Russia in Ukraine and crippling sanctions by the global community on Moscow as a response.
But Russian President Vladimir Putin stopped short of an outright invasion, choosing the “backdoor option” of formally recognizing the independence of two regions in eastern Ukraine. The White House and other Western governments retaliated with a host of measures, but none of which directly impacted crude exports from Russia, one of the world’s largest producers of oil.
Crude prices of both U.S. West Texas Intermediate, or WTI, and Brent have thus traded in a wide band of $90-$95 awaiting further word of military aggression by Russia or more punitive measures against Moscow.
London-traded Brent settled flat at $96.84 a barrel, after Tuesday’s seven-year high of $99.50.
New York-traded WTI settled up 19 cents, or 0.2%, at $92.10.
Crude prices moved lower in post-settlement trade after the Washington Post reported the potential release of more U.S. crude reserves to mitigate further spikes in pump prices of gasoline due to soaring energy markets.
If the United States imposes broader sanctions on Russia, Moscow could itself strike back by limiting sales of oil and other energy products to Europe and other parts of the world.
Russia produces roughly 11% of the world’s oil supply, or roughly 10.5 million barrels per day, according to the U.S. Energy Information Administration or EIA.
Aside from the Russia-Ukraine narrative, traders were on the lookout on Wednesday for U.S. weekly oil inventory data, due after market settlement from the American Petroleum Institute, or API.
The API will release at approximately 4:30 PM ET (21:30 GMT) a snapshot of closing balances on U.S. crude, gasoline and distillates for the week ended Feb. 18. The numbers serve as a precursor to official inventory data on the same due from the EIA on Thursday.
For the week ended Feb. 18, analysts tracked by Investing.com expect the EIA to report a crude stockpile build of 442,000 barrels, on top of the 1.12 million build it reported for the week to Feb. 11.
On the gasoline inventory front, the consensus is for a draw of 1.45 million barrels on top of the 1.33 million barrels consumed in the previous week.
With distillate stockpiles, the expectation is for a drop of 1.76 million barrels that would add to the prior week’s slide of 1.55 million.