Singapore, Feb. 16 (BNA): Oil prices stabilized on Wednesday after falling more than 3% in the previous session as investors gauged the impact of easing tensions between Russia and Ukraine against a tight balance between limited global supplies and a recovery in fuel demand.
Brent was trading at $93.19 a barrel at 02:53 GMT, down 10 cents, after falling 3.3% overnight after Russia announced a partial withdrawal of its forces near Ukraine, the United States has yet to materialize.
US West Texas Intermediate crude also settled and was last traded at $92.13 at 0247 GMT, after the contract ended Tuesday’s session 3.6% lower.
The two benchmarks hit their highest levels since September 2014 on Monday, with Brent touching $96.78 and WTI $95.82. The price of Brent crude jumped 50% in 2021, while WTI rose about 60%, as the global recovery in demand from the COVID-19 pandemic strained supply.
Russia’s Defense Ministry on Tuesday released footage showing it is returning some troops to bases after exercises, a move that led to profits from oil and a rebound on Wall Street and European stock markets, Reuters reported.
Analysts said that apart from the tension in Ukraine, the oil market remains tight and prices are still on the way to around $100 a barrel.
“Technically speaking, we could see prices heading back to $90 a barrel on profit taking, but they will head higher towards $100 as the economy gets back on track and more demand in a tight market,” said Jonathan Barratt, chief investment officer. An officer in the Probis group.
German Chancellor Olaf Schulz said on Tuesday he saw scope for more diplomacy to avert war between Russia and Ukraine, after four hours of talks with President Vladimir Putin.
“Talks between German Chancellor Schulz and President Putin have supported market expectations that an imminent Russian invasion appears less likely,” said Edward Moya, chief market analyst at brokerage OANDA.
As the Ukraine crisis intensified, the US Department of Labor reported that producer prices rose by more than eight months in January, a reminder that high inflation may persist through most of this year.
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