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Futures Movers: U.S. oil pulls back from 14-year high as traders weigh Russia-Ukraine war, talk of Iran deal

Oil futures saw choppy trade Thursday, retreating after the U.S. benchmark traded at a nearly 14-year high as traders weighed the Russia-Ukraine war and speculation around the potential for a restored nuclear accord that would allow Iran to resume crude exports.

Price action

April West Texas Intermediate crude futures
CL.1,
-0.56%

 
CLJ22,
-0.56%

was down $1.42, or 1.3%, at $109.18 a barrel after trading at a session peak of $116.57, the highest since August 2008. On Wednesday, oil settled nearly 7% higher at $110.60 a barrel on the New York Mercantile Exchange. Front-month contract prices, which traded as high as $112.51, marked their highest finish since May 2011, according to Dow Jones Market Data.

May Brent crude
BRN00,
-0.16%

BRNK22,
-0.16%

 the global benchmark, fell 64 cents, or 0.6%, to $112.31 a barrel after trading as high as $119.84. That follows Wednesday gain of 7.6% to $112.93 a barrel, the highest settlement since June 2014.

April natural gas
NGJ22,
-1.03%

fell 1.5% to $4.69 per million British thermal units.

April gasoline
RBJ22,
+0.54%

was little changed at $3.3085 a gallon. April heating oil
RBJ22,
+0.54%

was up 0.6% to $3.516 a gallon.

Market drivers

Oil briefly traded in negative territory after an Iranian journalist tweeted that an agreement on a renewed nuclear deal was imminent. The U.S. has indirectly participated in global talks aimed at restoring the nuclear accord after the Trump administration withdrew the U.S. from the deal in 2018.

A scramble for U.S. and Brent crude comes as global buyers have been shunning Russian oil, even at deeply discounted prices.

“Cash buyers are not buying Russian crude and that is causing a price spike because they must look elsewhere for supply. OPEC plus Russia is not going to be any help as it appears that because of OPEC’s deal with Russia they seemed to ignore that anything was going on in Ukraine,” said Phil Flynn, analyst at Price Futures Group.

OPEC+ earlier this week decided to stick with its plan to increase output by 400,000 barrels a day in April, continuing to resist calls for more aggressive production increases.

Analysts said the decision by the International Energy Agency to release 60 million barrels from the emergency oil reserves of member countries earlier this week was also insufficient to balance the current demand, against the backdrop of the Ukraine war.

“One factor that can ease off the current oil price is Iranian oil. So far, it doesn’t seem likely that we will see a day when Iranian oil will hit the market, and the threat of sanctions on Russian oil remains a real possibility,” said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients.

One more shoe to drop could be sanctions on Russian, oil, which has yet to happen, and that is something the market hasn’t priced in, said Aslam.

“If sanctions are imposed on Russian oil, $150 [a barrel] will be the most modest scenario. Under a coordinated action by the U.S. and its allies, strategic oil reserve release isn’t going to help oil prices,” he said.

Natural gas remained lower after the Energy Information Administration reported a withdrawal of 139 billion cubic feet of the fuel from storage last week, in line with analyst estimates.

— Myra P. Saefong contributed to this article.

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