In another reflection of wild volatility in global crude markets, oil futures fell slightly after opening higher on Wednesday and rising more than 6% in the previous session.
Benchmark Brent crude fell about 30 cents to about $104 a barrel, and US West Texas Intermediate (WTI) crude futures were down about 0.3% at $100 a barrel. Both contracts had gained over 6 per cent on Tuesday.
This comes after crude oil markets fell nearly 4 per cent on Monday after remaining weak for two weeks.
The volatility in oil prices reflects the deepening divide and changing opinion on a daily basis on the outcome of the Russia-Ukraine conflict and the ups and downs in the supply and demand narrative.
Volatility in recent weeks has not helped, the highest since June 20220, in the threat of isolating Moscow, the western country’s leading exporter of energy and commodities, following Ukraine’s March 22 invasion. is in retaliation. , the most significant attack on a European state since World War II.
Indeed, weak economic data from China’s COVID sanctions and demand concerns are likely to keep a lid on oil gains, with supply worries putting a floor on prices as Russia said peace talks with Ukraine had reached a dead end.
Russian oil and gas condensate production fell on Monday to its lowest level since July 2020, Reuters reported.
Also backing crude oil futures is OPEC telling the EU that it is not possible to reverse a potential Russian oil supply loss and indicated it would not pump more.
“The downside to oil prices is limited,” OANDA senior market analyst Jeffrey Haley told Reuters, calling peace talks a dead end and US President Joe Biden’s comments accusing Russia of genocide. “These are reinforcing that Ukraine’s position in Russia will not worsen anytime soon”, he said.
But the worry of demand is also not diminishing.
Weak demand from the world’s biggest energy buyer was reflected in data that showed China’s crude oil imports in March fell 14 percent from a year earlier.
Economic data from China and Japan suggest oil demand will be hit by slow growth.