Oil falls below $100 as Russia and Ukraine negotiate ceasefire | Oil and Gas News

A new round of talks between Russia and Ukraine has focused on discussing a possible ceasefire with an immediate troop withdrawal, a Ukrainian official said on Monday.

By Bloomberg

Oil fell below $100 a barrel as negotiations between Ukraine and Russia appeared to become more substantial and China imposed a province-wide lockdown to stem the spread of Covid-19.

New York futures fell more than 8% to a low of $99.76, trading in the $10 range on Monday. A new round of talks between Russian and Ukrainian officials has focused on discussing a possible ceasefire with an immediate troop withdrawal and security guarantees, Ukrainian negotiator Mykhailo Podolyak said.

Negotiations between the two countries are driving prices down in the near term as markets are “much more sensitive to sentiment than to the actual calculation of supply and demand,” said Rebecca Babin, senior energy trader at CIBC. Private Wealth Management.

Demand risks have also emerged with a resurgence of lockdown measures in China amid a surge in Covid-19 infections. The world’s biggest oil importer has placed 17.5 million people in Shenzhen under lockdown and banned residents of Jilin province from travelling, the first time the country has sealed off an entire region since April 2020.

Oil slides near $100 a barrel as Russia and Ukraine negotiate ceasefire

Oil prices soared after Russia invaded Ukraine, in part on fears that the loss of Russian flows could stretch an already tight market. Soaring energy prices added to inflationary pressures on the global economy, forcing banks to consider a phase of monetary tightening. This week, the Federal Reserve will likely raise interest rates for the first time since 2018, potentially strengthening the dollar and adding pressure to oil prices.

As the humanitarian crisis intensifies in areas under heavy bombardment, there is a flurry of diplomatic efforts to try to stop the war. A senior adviser to Ukrainian President Volodymyr Zelenskiy said “continuous” talks with Russia were underway via video, while Russian President Vladimir Putin spoke to his French and German counterparts after speaking with Zelenskiy. US Secretary of State Antony Blinken also spoke with Ukraine’s Foreign Minister.

Prices:

  • West Texas Intermediate for April delivery fell $8.42 to $100.91 a barrel at 11:29 a.m. New York.
  • Brent for May settlement slid $8.58 to $104.09 a barrel.

Meanwhile, the prospect of additional oil supplies from Iran quickly relieving a tight market was dashed on Friday after Tehran and world powers suspended talks to restore a nuclear deal. Russia has asked the United States for guarantees that the sanctions imposed for its invasion will not affect its planned partnership with the OPEC producer. Iran carried out a missile strike in Iraq after negotiations failed.

While Russia has been hit with stiff sanctions and the United States has banned imports of its crude, funds for the nation may not yet be completely snuffed out. India is reportedly developing a mechanism to facilitate trade using local currencies, while supertankers were still booked to load Russian oil off Denmark. At least some ships will be for traded cargo before the invasion.

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