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Oil prices climb as Russia-Ukraine ceasefire talks stoke volatile trading

Oil prices climb as Russia-Ukraine ceasefire talks stoke volatile trading

Oil prices increased early on Wednesday, rebounding back after plunging more than $1 a barrel earlier in the day, as Russia’s invasion of Ukraine continued to dominate tumultuous trade, with the latest market trigger being the announcement of ceasefire negotiations.

In the early hours of the morning, Brent futures were up 83 cents, or 0.8%, to $100.74 a barrel. The price of West Texas Intermediate (WTI) crude oil in the United States increased by 58 cents, or 0.6 percent, to $97.02 a barrel. In the previous session, both prices had fallen by more than $1, with Brent sliding to $98.86 a barrel and WTI softening to $94.90.

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In a video speech aired early on Wednesday, Ukrainian President Volodymyr Zelenskiy said that the stances of Ukraine and Russia in peace negotiations were sounding more reasonable, but that more time was required.

Oil traders are waiting for more information from the ceasefire talks following a two-day selloff in the oil markets, but crude prices are likely to remain under pressure for the foreseeable future because high inflation will eventually drag down economic growth and weaken demand, according to Tina Teng, an analyst at CMC Markets.

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It was the first time since late February that oil had fallen below $100 a barrel on Tuesday. Since Russia’s invasion of Ukraine on February 24, trading sessions have been very erratic, with prices reaching 14-year highs on March 7, but since then Brent has plummeted over $40 a barrel and WTI has fallen approximately $34.

China, the world’s most populous nation and second-biggest oil user have implemented tough steps to prevent the spread of the Covid-19 virus in recent days, raising fears about a decreasing demand in the country.

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The American Petroleum Institute reported that crude inventories in the United States increased by 3.8 million barrels for the week ended March 11, while gasoline inventories decreased by 3.8 million barrels and distillate stocks increased by 888,000 barrels, according to sources who spoke on the condition of anonymity.

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