Ammon News - Oil trickled down on Thursday, hovering around two-month lows, as the proposed price cap on Russian oil from G7 nations was considered higher than the current trading levels, alleviating concerns over tight supply.

A greater-than-expected build in United States gasoline inventories and widening Covid controls in China added to downward pressure.

Brent crude futures dipped 21 cents, or 0.3 per cent, to $85.20 a barrel by 04"31 GMT, while US West Texas Intermediate (WTI) crude futures fell by 16 cents, or 0.2pc, to $77.78 a barrel.

Both benchmarks plunged more than 3pc on Wednesday on news the planned price cap on Russian oil could be above the current market level.

The G7 is looking at a cap on Russian seaborne oil at $65-70 a barrel, according to a European official, though European Union governments have not yet agreed on a price.

EU governments will resume talks on the price cap on Thursday or Friday, according to EU diplomats.

Oil prices also came under pressure after the Energy Information Administration (EIA) said on Wednesday that US gasoline and distillate inventories had both risen substantially last week. The increase alleviated some concerns about market tightness.