Crude oil futures and related exchange traded funds retreated as the threat of sanctions on Russian oil was no longer being considered.
On Friday, the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, were down 1.8% and 2.2%, respectively. Meanwhile, WTI crude oil futures were 1.8% lower to $91.1 per barrel, and Brent crude futures fell 2.2% to $96.9 per barrel.
Oil futures pulled back from the highs of $100 earlier in the week after the U.S. State Department stated that it will not be sanctioning Russian crude oil, since it would do more harm to U.S. consumers than Russian President Vladimir Putin, Bloomberg reports.
“It seems that the U.S. and its allies want to inflict pain on Russia but do not want to impede their ability to deliver energy products to the world,” Bart Melek, head of commodity strategy at TD Securities, told Bloomberg.
Further bolstering the energy security outlook, the International Energy Agency promised to ensure global energy supplies in the midst of the crisis, Reuters reports.
“Today I convened a meeting to bring together representatives of the IEA’s 31 member countries,” IEA executive director Fatih Birol said in a statement. “We reviewed how the Russian invasion has increased concerns among oil market participants against the backdrop of already tight global markets and heightened price volatility.”
President Joe Biden previously said that the United States will be working with other countries to release additional oil from global strategic crude reserves after oil prices touched $105 per barrel.
“This is to ensure all are on the same page on current market conditions,” a U.S. source with knowledge of the talks told Reuters.