Crude oil futures consolidate as investors in wait-and-see mode

Crude oil futures were little changed in mid-morning Asian trade Feb. 23, as investors awaited further developments in the Russia-Ukraine crisis after the latest round of Western sanctions against Russia for its recognition of the rebel-held Donetsk and Luhansk regions.

At 10:15 am Singapore time (0215 GMT), the ICE April Brent futures contract was up 16 cents/b (0.17%) from the previous close at $97/b, while the new front-month NYMEX April light sweet crude contract rose 16 cents/b (0.17%) at $92.07/b.

The front month ICE Brent contract had been close to topping the $100/b handle in the Feb. 22 session, surging 4.3% to an intraday high of $99.50/b, before shedding gains to settle 1.5% higher on the day.

"The sanctions announced so far have underwhelmed commodity markets," ING analysts Warren Patterson and Wenyu Yao said in a Feb. 23 note. "As a result, oil failed to break [$100/b] and instead gave back a lot of its recent gains."

"Sanctions announced up until now should not have much impact on Russian oil exports. Local banks which are heavily involved within the commodities industry have been left untouched," they added.

US President Joe Biden Feb. 22 announced some financial banking and sovereign debt sanctions against Russia and an effort with Germany to suspend the Nord Stream 2 natural gas pipeline.

Russia, on the other hand, appeared to have moved more troops and equipment to Western Russia and Southern Belarus, which borders Ukraine, media reports indicated, citing satellite imagery in the last 24 hours.

Meanwhile, signs of further progress in the Iranian nuclear talks has helped to calm nerves. Russian envoy Mikhail Ulyanov said Feb. 23 that negotiations were about to "cross the finish line".

The US has also floated once again the idea of a globally coordinated crude stockpile release as the Russia-Ukraine tensions keep oil prices above $90/b.

The Biden administration has "an ongoing effort right now to execute on a plan that's in coordination with oil producers and oil consumers to make sure the world knows we're going to have stable energy supplies," a senior US official said on a Feb. 22 background call.

Sentiment in financial markets is expected to be heavily dominated by developments in the Russia-Ukraine crisis for the time being.

"While there are some expectations for a standstill at [the] current point in time, market moves will be heavily news-driven with any further military action from Russia or punitive measures from Western parties as catalysts for further risk-off mood," IG market strategist Yeap Jun Rong said in a note.