Crude oil prices fell below $110 per barrel on optimism for progress in Russian-Ukrainian peace negotiations despite the conflict’s continued escalation. Crude oil prices fell below $110 per barrel on optimism for progress in Russian-Ukrainian peace negotiations despite the conflict’s continued escalation.
Crisis Ahead
On Sunday, Russian missiles struck a huge Ukrainian base near the Polish border. Nonetheless, both Russia and Ukraine expressed the most optimistic assessments of the possibilities for negotiations, boosting investor optimism on Monday.
Dip it goes
Oil prices fell as a result of the prospect of peace, with benchmark Brent crude last quoted by Reuters down more than 2.5 percent at less than $110 early on Monday, as some oil-producing countries hinted they would boost production hampered by Russia’s invasion of Ukraine. Since the invasion, which Moscow describes as a coup, crude prices have skyrocketed “special military operation, but with speculation of additional supply from other nations, particularly Iran, they have stabilized slightly, with increased volatility following news flow.
Brent prices fell 4.8 percent last week after reaching a record high of $139.13 on Monday. Prices had risen by more than 20% in the preceding week.
US Pain
- US crude oil fell 5.7 percent on a weekly basis after reaching a high of $130.50 on Monday. Both contracts reached these price maxima for the final time in 2008.
- The markets’ attention will now shift to the International Energy Administration’s (IEA) and Organization of the Petroleum Exporting Countries (OPEC) oil market reports for clues (OPEC). Both have previously stated that this year’s market should be oversupplied.
- On Sunday, US Deputy Secretary of State Wendy Sherman stated that Russia was indicating a willingness to engage in real negotiations over Ukraine, despite Moscow’s stated goal of “destroying” its neighbor.
- By contrast, Ukrainian negotiator Mykhailo Podolyak stated that Russia had begun “constructively communicating.” Russia’s incursion, which Moscow describes as a “special operation,” has wreaked havoc on the world’s energy markets.
- “Oil prices may continue to moderate this week as markets evaluate the impact of Russia’s sanctions, as well as hints of parties negotiating a cease-fire,” Tina Teng, an analyst at CMC Markets, told Reuters.
As markets have priced in much tighter supply between February and early March, the attention has shifted to monetary policy at this week’s FOMC meeting, which might further strengthen the USD and put downward pressure on commodity prices “Ms. Teng continued.
published by: Aditya Andharia
Edited By: Khushi Thakur
