Oil drops 2% amid Russia-Ukraine peace talks, China lockdowns

Storage tanks are seen at Marathon Petroleum’s Los Angeles Refinery, which processes home & imported crude oil into California Air Sources Board (CARB), gasoline, diesel gasoline, and different petroleum merchandise, in Carson, California, U.S., March 11, 2022. Image taken with a drone. REUTERS/Bing Guan/Recordsdata

HOUSTON, March 29 (Reuters) – Oil costs ended 2% decrease on Tuesday as talks progressed between Russia and Ukraine to finish their weeks-long battle, although Moscow negotiators stated a promise to scale down some navy operations didn’t symbolize a ceasefire.

Additional weighing on oil futures, new lockdowns in China to curb the unfold of the coronavirus prompted issues that gasoline demand might take successful.

Brent crude settled down $2.25, or 2%, at $110.23 a barrel, whereas U.S. West Texas Intermediate (WTI) crude was down $1.72, or 1.6%, at $104.24.

Each benchmarks fell 7% on Monday and dropped as a lot as 7% once more early on Tuesday earlier than bouncing off session lows.

Ukrainian and Russian negotiators met in Turkey for the primary face-to-face discussions in almost three weeks. The highest Russian negotiator stated the talks had been “constructive.”

Russia promised to scale back its navy operations round Kyiv and northern Ukraine; Ukraine proposed adoption of impartial standing however with worldwide ensures that it will be protected against assault. learn extra

Oil got here off session lows when Moscow’s lead negotiator cautioned that Russia’s promise to lower navy operations didn’t symbolize a ceasefire and a proper settlement with Kyiv had a protracted solution to go. learn extra

“Perhaps there’s causes to be a bit extra optimistic than we had been this time yesterday, however I do not assume this entire state of affairs with Ukraine goes to go away within the subsequent quarter-hour,” cautioned Robert Yawger, govt director of power futures at Mizuho.

Sanctions imposed on Russia over its invasion of Ukraine had disrupted oil provides and pushed oil costs to just about $140 a barrel, its highest in about 14 years. learn extra

New lockdowns in Shanghai to curb rising coronavirus circumstances additionally pressured costs on Tuesday because the market anxious a few falloff in Chinese language demand. Shanghai accounts for about 4% of China’s oil consumption, ANZ Analysis analysts stated. learn extra

Lockdowns have dampened consumption of transportation fuels in China to some extent the place some unbiased refiners are attempting to resell crude bought for supply over the following two months, merchants and analysts stated.

Weak spot in world oil demand is predicted to persist by means of April and Could, stated Rystad Power’s senior vp of research, Claudio Galimberti, citing the Russia-Ukraine tensions, excessive oil costs and China’s COVID-19 state of affairs.

U.S. crude shares fell by 3 million barrels final week, in keeping with market sources, citing American Petroleum Institute figures, steeper than the 1.0 million-draw that analysts polled by Reuters had estimated. Authorities stock knowledge is due on Wednesday.

Early within the session, oil costs rose virtually $2 on continued disruption of Kazakhstan’s provides and as main producers confirmed no signal of speeding to spice up output considerably.

Kazakhstan is ready to lose at the least a fifth of its oil manufacturing for a month after storm injury to mooring factors used to export crude from the Caspian Pipeline Consortium (CPC), the power ministry stated.

The OPEC+ producer group is predicted to stay to its plan for a modest output rise in Could regardless of excessive costs and calls from the USA and different customers for extra provide. learn extra

The power ministers of Saudi Arabia and the United Arab Emirates, key members, stated OPEC+ mustn’t interact in politics as strain mounted on them to take motion towards Russia over its invasion of Ukraine. learn extra

Reporting by Yuka Obayashi in Tokyo and Bozorgmehr Sharafedin in London
Extra reporting by Sonali Paul in Melbourne
Enhancing by David Gregorio, Jonathan Oatis and Marguerita Choy

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