Oil prices turn to a 2-week low on Ukraine talks

On Tuesday, oil prices slipped to a two-week low as ceasefire talks between Russia and Ukraine eased fears of further supply disruptions.

Accordingly, Brent Crude futures for May delivery edged down 5.92% or 6.34 points to $100.71 per barrel.

The international benchmark extended a drop of 3.60% to $106.90 per barrel yesterday.

At the same time, US West Texas Intermediate (WTI) April crude contracts slashed 5.89% or 6.10 points to $96.94 per barrel. It trailed Monday’s plunge of 3.88% to $103.01 per barrel.

Correspondingly, Brent has shed $40.00 since hitting a 14-year high of $139.13 per barrel on March 07.

Likewise, WTI slashed more than $30.00 since touching its highest since 2008 of $130.50 per barrel. Subsequently, traders reduced their bullish bets this week.

Previously, prices surged to multi-year highs as the worldwide economic outlook deteriorated.

Analysts explained that expectations of positive developments in the Russia-Ukraine ceasefire talks supported hopes to ease tightness in the global crude oil market.

However, Moscow troops continued to attack residential neighborhoods of Kyiv in the early hours of Tuesday.

This strike came before leaders of Poland, the Czech Republic, and Slovenia prepared to visit the war-torn Ukrainian capital.

On Monday, the local government said 19 people died due to a Kremlin airstrike on a TV tower. These attacks came on the 20th day of a war that laid waste on Ukrainian cities.

The geopolitical crisis also triggered a wave of international sanctions against Russia’s economy.

Meanwhile, US President Joe Biden announced plans to travel to Brussels next week. He will meet NATO leaders to discuss the escalating crisis.

Oil slumps fears over China demand

The fresh Covid-19 lockdowns in China also pulled oil prices today as concerns rose over slower demand.

The world’s second-largest economy reported a steep climb in daily coronavirus infections today.

The new cases doubled from the 3,507 domestically transmitted cases with confirmed symptoms on Monday, hitting a two-year high.

The country has adopted a strict zero-Covid strategy with tough and costly measures to eradicate outbreaks quickly.

Chinese cities have placed tighter restrictions on business activity to fight the surge due to the Omicron coronavirus variant.

Eventually, this move has fuelled jitters over China’s growth prospects, weighing the market sentiment.

In line with this, experts noted that oil demand could take a hit if Beijing’s economic output falls.