Brent crude fell $2.25, or 2%, to $110.23 a barrel, while US West Texas Intermediate (WTI) closed down $1.72, or 1.6% , $104.24.
Both contracts had fallen 7% on Monday and were down as much as 7% again by early Tuesday, before bouncing off session lows.
What happened on Tuesday was that Ukrainian and Russian negotiators met in Turkey for the first face-to-face talks in nearly three weeks. The top Russian representative said the talks were “constructive.”
After the meeting, Russia promised to reduce its military operations around kyiv and northern Ukraine; while Ukraine proposed to adopt a neutral status, but with international guarantees that it would be protected against attack.
Oil rebounded from session lows as Moscow’s top negotiator warned that Russia’s pledge to scale back military operations did not amount to a ceasefire. and that there was a long way to go for a formal agreement with kyiv.
“There may be reasons to be a little more optimistic than we were yesterday, but I don’t think this whole situation with Ukraine is going to go away in the next 15 minutes,” said Robert Yawger, executive director of energy futures at Mizuho.
Sanctions imposed on Russia for its invasion of Ukraine disrupted oil supplies, driving up prices. The barrel also came under pressure on Tuesday on fears of lower demand from China following new lockdowns in Shanghai to curb rising coronavirus cases.
Shanghai accounts for about 4% of China’s oil consumption, according to analysts at ANZ Research.
Source: Ambito
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