Oil Drops From Five-Week High As Russia, Ukraine Reach Accord

LONDON, England -- Crude oil fell from near a five-week high as Russia reached an agreement with Ukraine on oil exports to Europe, allaying concerns of a supply disruption.
Russia agreed to pay 30 percent more to transport oil to Europe via Ukraine next year, according to Ukrainian state energy company NAK Naftogaz Ukrainy. Crude climbed to a five- week high yesterday as Iran, holder of the second-largest oil reserves, continued a crackdown on political protests.“This takes one of the geopolitical risks off the table, I assume there’s not going to be a disruption in Russian flows to Europe,” said Olivier Jakob, managing director of Petromatrix GmbH in Zug, Switzerland. “If prices are still $78 to $80 at the start of next week there should be some downward pressure as stocks are so plentiful.”Crude oil for February delivery declined as much as 50 cents, or 0.6 percent, to $78.27 a barrel, in electronic trading on the New York Mercantile Exchange. It was at $78.69 at 12:55 p.m. London time. Oil gained 72 cents to $78.77 yesterday, the highest close since Nov. 18.Futures have advanced 77 percent this year and tripled in the past decade.Brent crude for February settlement was at $77.31 a barrel, down 1 cent, on the ICE Futures Europe exchange at 12:55 p.m. local time. It rose $1.01, or 1.3 percent yesterday, to $77.32 a barrel.