Energy

Oil falls below $100 on Russia-Ukraine talks, demand concerns

Oil fell below $100 a barrel in a volatile session on Wednesday, as it came under pressure from signs of progress in Russia-Ukraine peace talks and a closely-watched report that cut its forecast of world demand.

Ukraine’s president said the positions of Ukraine and Russia were sounding more realistic, but time was needed. read more Russia’s foreign minister said some deals with Ukraine were close to being agreed. read more

“Fears of a supply disruption have been tempered by tentative signs of progress in ceasefire talks between Russia and Ukraine,” said Stephen Brennock of oil broker PVM.

“That said, an end to hostilities still seems like a long way off.”

Brent crude fell 54 cents or 0.5% to $99.37 a barrel by 1037 GMT, having traded as high as $103.70 earlier. U.S. West Texas Intermediate (WTI) crude slipped 96 cents or 1% to $95.48.

The price falls also followed the release of the International Energy Agency’s monthly report that cut its oil demand forecast for 2022. . A day earlier, the Organization of the Petroleum Exporting Countries held its forecast steady.

Crude settled below $100 on Tuesday, the first time since late February. Trading has been volatile since Russia’s invasion of Ukraine on Feb. 24, with prices hitting a 14-year high on March 7, but Brent has since fallen nearly $40 a barrel.

The U.S. Federal Reserve is expected to raise rates for the first time in three years later on Wednesday and give guidance on future tightening. Investors are expecting the central bank to raise rates by at least 25 basis points.

Oil had also come under pressure this week from concerns of slowing demand in China as it takes measures against the Omicron coronavirus variant. Those fears appeared to ease on Wednesday, as figures showed fewer new cases. read more

Besides the Fed decision, in focus on Wednesday will be the latest round of U.S. inventory data due at 1530 GMT from the Energy Information Administration. Analysts expect a 1.4 million barrel drop in crude stocks.

Additional reporting by Emily Chow; Editing by Louise Heavens and Barbara Lewis

This article was originally published by Reuters.

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