Oil prices fell Wednesday as the Group of Seven (G7) nations looked at a price cap on Russian oil above where the crude grade is currently trading.
Brent crude futures fell $3.14, or 3.6%, to $85.22 U.S. a barrel, while U.S. West Texas Intermediate (WTI) crude futures were down $3.13, or 3.9%, at $77.82 a barrel.
G7 nations are looking at a price cap on Russian seaborne oil in the range of $65-70/bbl, according to a European official on Wednesday.
Meanwhile, Urals crude delivered to northwest Europe is trading around $62-$63/bbl, although it is higher in the Mediterranean at around $68/bbl, according to Refinitiv data.
A senior U.S. Treasury official said on Tuesday that the price cap will probably be adjusted a few times a year.
The news added to demand concerns relating to top crude oil importer China, which has been grappling with a surge in Covid-19 cases, with Shanghai tightening rules late on Tuesday.
Also adding pressure was an OECD economic outlook that sees a deceleration in global economic expansion next year.
The price decline was limited by a fall in U.S. crude inventories, which were down by about 4.8 million barrels for the week ended Nov. 18, data from the American Petroleum Institute showed, according to market sources.
