Oil Drops $5 on Russia-Ukraine Talk Encouragements

Brent was under by $4.62, or 4.1%, at $108.05 a barrel at 1152 GMT, and U.S. West Texas Intermediate (WTI) crude dropped $5.45, or 5%, to $103.88 a barrel.

Both contracts have swelled since Russia’s February 24 invasion of Ukraine; they are up approximately 40% for the year to date.

Ukrainian and Russian negotiators should talk again on Monday via video link. Moreover, after weekend negotiations, negotiators gave their most optimistic assessments, presenting positive results within days.

China sees a surge in coronavirus cases as the world’s biggest crude oil importer and second-largest consumer after the United States. The highly transmissible Omicron variant is spreading to more cities, starting from Shanghai to Shenzhen.

Subsequently, its daily new caseload figures have hit two-year highs, with 1,437 new verified COVID-19 cases reported on March 13.

In March, Russia’s oil and gas condensate production rose to 11.12 million barrels per day (BPD). Two sources are familiar with oil production data-informed Reuters, despite sanctions on Russian oil.

Furthermore, India is also contemplating taking up a Russian offer to buy its crude oil and other commodities at discounted prices with payment via a rupee-rouble transaction, two Indian officials stated.

Saudi Arabia to Raise Output

The United States has announced a ban on Russian oil imports; Britain said it would phase them out by the end of the year. Russia is the world’s top exporter of crude and oil products combined, shipping around 7 million BPD or 7% of global supplies.

British Prime Minister Boris Johnson is trying to persuade Saudi Arabia to increase its oil output, a senior minister said, following reports that Johnson would travel to the OPEC heavyweight this week.

On Monday, International Energy Agency (IEA) chief Fatih Birol suggested oil-producing countries pump more to stabilize markets.