Oil price steadies after German-Russia talks over Ukraine

Oil price steadies after German-Russia talks over Ukraine

/ Oil & Gas / Wednesday, 16 February 2022 08:51

Oil prices steadied after retreating more than 3% in the previous session as investors evaluated the impact of easing Russia-Ukraine tension in the backdrop of tight global supplies and recovering fuel demand.

Brent traded at $93.19 a barrel, down 10 cents, having slid 3.3% overnight after Russia announced a partial pullback of its troops near Ukraine, yet to be verified by the United States.

US West Texas Intermediate (WTI) crude also held steady and last traded at $92.13, after the contract ended Tuesday's session down 3.6%.

Four hours of talks between German chancellor Scholz and president Putin reassured the market sentiments regarding Russia’s intention to invade Ukraine.

However, the oil market remains tight and prices are still on course for a move towards $100 a barrel regardless of the Ukraine tension, according to market watchers

Meanwhile, Middle East benchmark Dubai crude soared to a record this week.

The global supply-demand balance has tightened as the Organization of the Petroleum Exporting Countries and its allies are lagging behind commitments to increase output by 400,000 barrels per day each month.

Demand is robust as refiners globally are cranking up operations to reap higher margins on gasoline and diesel.

Both WTI and Brent had hit their highest since September 2014 on Monday, with Brent touching $96.78 and WTI reaching $95.82. The price of Brent jumped 50% in 2021, while WTI soared about 60%, as a global recovery in demand from the COVID-19 pandemic strained supply.

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