After Soaring in The Previous Session Due to Russia's Sanctions, The Price of Oil Declines

Oil prices declined in early Asian trading on Thursday, taking a breather after gaining more than 5 percent in the previous session in response to fresh Russian sanctions against some European gas firms.

On Wednesday, Russia sanctioned 31 enterprises located in nations that placed sanctions on Moscow during the February invasion of Ukraine.

At the same time, Russian gas flows to Europe via Ukraine decreased by a quarter, causing market concern. It was the first time since the invasion when exports via Ukraine were interrupted.

At 00:13 GMT, Brent crude futures decreased 9 cents to $107.42 a barrel. WTI crude prices dropped 13 cents per barrel to $105.58.

As a result of supply concerns following Russia's invasion of Ukraine in February, prices have climbed by roughly 35 percent so far this year.

The European Union continues to negotiate an embargo on Russian oil, which analysts say will tighten the market more and alter trade flows. The vote requires unanimity, but it has been delayed due to Hungary's staunch resistance.

As a result of China's efforts to stop the spread of coronavirus, fears of a decline in demand have curbed price increases.

Stephen Innes, managing partner of SPI Asset Management, predicts that oil prices will be capped in the near future unless China provides substantial policy support or policymakers embrace a different strategy to COVID, both of which seem highly improbable.