LONDON: Global oil prices fell below $107 a barrel on Monday on receding fears of an escalation of tension in Crimea after its vote to join Russia passed without major violence and U.S. and European sanctions appeared limited to individuals.
Brent crude futures fell $1.45 to $106.76 by 1506 GMT. U.S. crude futures were down $1 cents at $97.89.
"There's a relief that we haven't had any widespread violence or escalation within Crimea, so you're getting a little bit of a sell-off after the gains of the last few weeks," Michael Hewson, chief markets analyst at CMC Markets, said.
"They're token sanctions because there isn't the appetite there to punish Russia significantly."
Brent had climbed 10 cents and U.S. crude benchmark WTI had risen 24 cents in early trade on the risk of supply disruptions if the United States and Western countries imposed harsh sanctions on leading oil and gas producer Russia.
The United States and Europe have rejected the outcome of the referendum, announcing asset freezes and travel bans on Russians and Ukrainians linked to Crimea's efforts to realign itself with Moscow.
But they have so far targeted individuals rather than imposing broad trade or financial measures that would inflict significant economic damage. Russian assets and the rouble rebounded on Monday on the view that sanctions would be limited.
"There may be an element of holding back just in case there's an escalation in the eastern part of Ukraine," said Hewson. "At the end of the day you don't want to fire all your bullets at once."
The potential for warmer weather in the United States and Europe was also likely to ease oil demand after a long, harsh winter, exerting further downward pressure on prices, traders and analysts said.
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