At 9:34 a.m. ET on Wednesday, in anticipation of the weekly report of oil reserves in the US by the Energy Information Service, the crude WTI increased by 3.63% to $ 108.00 and the crude Brent traded 3.45% to $ 114.03.
Instability in the oil market continued this week. Oil fell early yesterday, with the US benchmark falling just below $ 100 a barrel, after indications emerged that the resumption of Russia-Ukraine peace talks after two weeks could be constructive. During talks in Istanbul on Tuesday, Russia promised to significantly reduce its military operations and activities around Kyiv and the northern city of Chernihiv. Ukraine, for its part, has suggested maintaining a neutral regime and not joining alliances or hosting troops from other countries on its territory.
The United States, however, seemed skeptical of Russia’s promises to curtail its campaign, and on Wednesday, the market appeared to be reluctant to buy into Moscow’s promises. Prices also rose after the American Petroleum Institute (API) estimated late Tuesday that there was a 3.0 million barrel draw this week for crude oil, compared with analysts’ forecasts of 1.558 million barrels.
On Wednesday, energy markets in Europe were preparing for a possible shutdown of Russian gas ahead of a March 31 deadline given by Vladimir Putin to Gazprom and the central bank to settle ruble payments for gas.
In addition, Moscow signaled today that it could soon demand rubles for other exports, including those of oil, metals and grain.
“Given the level of uncertainty in the market at the moment combined with the narrow supply / demand balance, we expect oil prices to remain extremely volatile. “Falling market liquidity will also add further volatility,” ING strategic analysts Warren Patterson and Wenyu Yao said on Wednesday.
By Tsvetana Paraskova for Oilprice.com
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