LONDON: Brent crude fell towards $104 a barrel on Thursday as worries over the impact of trade sanctions on global economic growth added to concerns about ample oil supply.
Russia announced a full list of U.S. and EU food imports to be banned in retaliation against Western sanctions over its support for rebels in Ukraine.
"This continued escalation between the EU, U.S. and Russia over sanctions will be a negative for global economic growth," said Olivier Jakob, oil analyst at Petromatrix consultancy in Switzerland.
Brent crude was down 26 cents at $104.33 a barrel by 1025 GMT, after closing at $104.59 on Wednesday, its lowest finish since Nov. 7.
U.S. crude was down 27 cents at $96.65 a barrel, after reaching a six-month low of $96.69 in the previous session.
Prime Minister Dmitry Medvedev said Russia will ban fruit, vegetables, meat, fish, milk and dairy imports from the United States, the European Union, Australia, Canada and Norway. The ban is valid from Aug. 7 and will last for one year, he said.
Medvedev also said Moscow was considering barring European Union and U.S. airlines from flying over Russian territory.
Jakob said recovery in the European economy remained fragile and an escalation in East-West tensions would harm growth, weighing on the oil market.
"This (Russian ban on food imports) will likely be followed by more sanctions from the EU and the U.S," he said.
Oil prices have fallen more than $10 a barrel over the past six weeks, as global supply exceeded demand, building up a glut in the Atlantic Basin and Asian markets.
This has pushed futures prices for prompt delivery below those of delivery in later months - a market structure known as contango.
"For the Brent contango to endure, geopolitical tension must remain muted while the surplus in light oil supply in the Atlantic Basin must persist," analysts at BNP Paribas said in a note.
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