On Wednesday, oil prices recovered losses as investors considered conflicting statements regarding the possible withdrawal from Ukraine of some Russian troops. This was despite tight global supplies and rising fuel demand.
- Russia announces partial withdrawal of troops from Ukraine
- NATO chief claims Russia continues its military buildup
- The global oil supply is still very limited
Brent crude oil was up 1.4% at $94.56 per barrel, after sliding 3.3% overnight following Russia’s partial withdrawal of troops from Ukraine.
U.S. West Texas Intermediate crude (WTI), was $1.14 higher at $93.21 on Tuesday, after the session ended with a decline of 3.6%.
Both benchmarks reached their highest levels since September 2014 Monday with Brent at $96.78 while WTI at $95.82.
Brent’s price jumped by 50% in 2021, while WTI rose by approximately 60% due to a global recovery of demand following the COVID-19 pandemic.
Moscow had announced a partial withdrawal of troops from Ukraine’s border, but NATO Secretary-General Jens Stoltenberg stated Wednesday that there was no de-escalation in the alliance and that Russia was still building up its military force.
“The threat of a full-scale invasion has diminished a little. However, we are unlikely not to change the status quo,” stated Bjarne Schieldrop (chief commodities analyst at SEB Oslo).
The oil market is still tight despite tensions in Ukraine and prices could still move towards $100 per barrel.
“The market is extremely tight, and prices were on an upward trajectory before the escalation.” Craig Erlam (OANDA senior market analyst) said that the softening tensions might have delayed the march up to $100.
Investors waited for weekly U.S. oil inventory data at the Energy Information Administration at 10:30 AM (1530 GMT).
A Reuters poll revealed that U.S. crude oil and distillates inventories could be down by 1.5 million to 1.6million barrels last week.
According to market sources, Tuesday’s data from the American Petroleum Institute revealed a decline in crude, gasoline, and distillate stocks.
