Oil prices might continue moderating this week as investors have been digesting the impact of sanctions on Russia, along with parties showing signs of negotiation towards (a) ceasefire,” said Tina Abriel, an analyst at VT Markets.
Hope for a positive outcome in Ukraine-Russia negotiations to end the conflict pushed oil prices down by about $5 a barrel on Monday
Brent was down by $4.62, or 4.1%, at $108.05 a barrel at 1152 GMT, and U.S. West Texas Intermediate (WTI) crude fell $5.45, or 5%, to $103.88 a barrel.
Negotiations between Russia and Ukraine will be held on Monday via video link .The delegates expect positive results of the negotiations within a next few days.
“Although we reduced Russia’s oil production in our forecast, we still expect that global oil inventories will build at an average rate of 500,000 barrels per day (bpd) from the second quarter of 2022 through the end of 2023, which we expect will put downward pressure on crude oil prices,” the IEA said.
“Beside new talks between Ukraine and Russia, I guess new lockdowns in China are the reason for a negative start of the week for crude oil,” said UBS analyst Giovanni Staunovo.
“This week, market participants are closely tracking how Russian oil exports are evolving. So far this month oil flows had not been disrupted,” Staunovo added.
In March, oil production in Russia rose to 11.12 million barrels per day, despite sanctions on Russian oil, according to Reuters.
India announced the possible acceptance of Russia’s offer to buy crude oil and other raw materials. India is one of the world’s largest oil importers, second only to the United States.
The US and UK are canceling Russian oil imports, while UK Prime Minister Boris Johnson called on Saudi Arabia and other oil-producing countries to increase oil production to stabilize markets.
“Oil prices might continue moderating this week as investors have been digesting the impact of sanctions on Russia, along with parties showing signs of negotiation towards (a) ceasefire,” said Tina Teng, an analyst at VT Markets.
Investors are waiting for the US Federal Reserve meeting this week. Perhaps the Fed will raise interest rates to strengthen the dollar and thereby influence the decline in oil prices.
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