LONDON: Brent crude oil futures fell for the second straight session on Wednesday, dropping below $109 a barrel on an easing of fears that Russia's incursion into Ukraine could lead to war.
Brent is now more than $3 below a two-month high hit at the start of the week following Russia's seizure of Ukraine's autonomous Crimea region, with prices having retraced all the gains seen on Monday.
US crude held steady, narrowing its discount to Brent to the lowest since October after an industry report showed the fifth consecutive weekly drawdown in inventories at the contract's delivery point in Cushing, Oklahoma.
"Given that we fell so hard after rallying so hard on Monday, the upside for Brent remains very limited," said Michael Hewson, an analyst at CMC Markets in London.
April Brent was down 32 cents at $108.98 a barrel at 0916 GMT, after ending $1.90 lower in the previous session.
The contract hit $112.39 a barrel on Monday, its highest since Dec. 30.
US crude for April delivery was down 6 cents at $103.27, after falling $1.59 on Tuesday.
The US contract hit its highest since Sept. 20 on Monday at $105.22.
Its discount to Brent narrowed to as little as $5.59 on Wednesday, the smallest gap since October.
Russian President Vladimir Putin pulled back troops from the Ukraine border on Tuesday, saying he would use force only as a "last resort".
Russia is the world's largest crude producer and supplies a third of Europe's gas.
Tensions remain elevated, however, with the Interfax news agency reporting Russian forces had seized two Ukrainian missile defence battalions in the Crimea region on Wednesday. The Ukrainian Defence Ministry was unable to comment immediately on the report.
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