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By Bloomberg

Most U.S.-traded Russian stocks declined as European Union leaders agreed to extend sanctions linked to the Ukraine conflict, outweighing a gain in crude prices.

Oil producer OAO Lukoil slid 1 percent to $46.05, helping lead declines in the Bloomberg Russia-US Equity index even as crude, the country’s biggest export, rose for a second day after concern eased that a global supply glut will persist. Russian stocks fell as much as 0.8 percent in New York on Wednesday before rebounding with emerging-market assets as the Federal Reserve indicated it will raise U.S. interest rates at a gradual pace.

Russia’s stocks and currency slumped after two EU officials, speaking on condition of anonymity under the group’s media rules, said representatives agreed to extend the trade and investment curbs imposed last year after President Vladimir Putin annexed Crimea from Ukraine. The sanctions have pushed the economy toward its first recession since 2009 and have remained in place as the country’s former Cold War adversaries say Russia continues to support a rebellion in the former Soviet republic.

“The Ukraine crisis is rumbling in the background,” Nicholas Spiro, managing director at Spiro Sovereign Strategy in London, said by phone on Wednesday. “It is still a driver of sentiment toward Russian assets but it’s not the most important -- there’s a plethora of external and country-specific risks, and the Ukraine crisis is just one of them.”

Growth Outlook

Russia plans to prolong its food-import ban for six months in response to the sanctions, two people with knowledge of the matter said Wednesday, as the country has adjusted to the embargo and can prolong it indefinitely. The Fed gave a revised outlook that indicated a shallower pace of interest-rate increases in 2016, easing concern that a rapid increase in U.S. borrowing costs will sap demand for riskier assets in developing nations.

Russian stocks and oil prices had rebounded earlier in the year amid relative calm in Ukraine and an improved outlook for the country’s economy. Volatility in the Market Vectors Russia ETF jumped to 31 percent last week and ADRs dropped after fighting in Eastern Ukraine threatened the cease-fire and the oil rebound faltered.

The International Monetary Fund and Bloomberg analysts recently decreased their estimates for this year’s contraction in Russia’s gross domestic product. The IMF projects a 3.4 percent decrease, down from a 3.8 estimate, and Bloomberg analysts lowered their estimate to 3.7 from 4 percent.

The Bloomberg benchmark of U.S.-traded Russian companies gained less than 0.1 percent, with five stocks falling for each three that gained. Mining company OAO Mechel’s American depositary receipts dropped the most, falling 2.4 percent to $1.23. Telecommunications company OAO Mobile TeleSystems rallied 3.5 percent to $9.84.

Futures contracts on the dollar-denominated RTS Index expiring this month rose 1.3 percent to 94,860 in U.S. hours. recovering from a 0.8 percent drop.

Moscow-based aluminum producer United Co. Rusal climbed 1.1 percent to HK$4.29 at 10:53 a.m. in Hong Kong.