Oil swayed between gains and losses after the Kremlin indicated progress in peace talks between Russia and Ukraine.
Futures in London fluctuated between $ 98 and $ 104 per barrel on Wednesday, recording more than $ 5 a day. Russia has said it wants Ukraine to become a neutral country but to retain its own armed forces.
The International Energy Agency has previously sent mixed signals to the market. Russia's output is expected to fall to a quarter next month, but this year's oil demand expectations have also fallen sharply as a result of higher prices. China is battling the new Covid wave and traffic congestion in Shanghai is low, a sign of the impact on the country's demand.
"Currently the volatility is great, the movements are very dramatic and it is becoming very difficult to find any position in the market," said Gary Ross, hedge fund manager who has become a veteran oil advisor at Black Gold Investors LLC. "We may have very tight markets in a month, which is very different from what it feels like today."
The war in Ukraine and the sanctions imposed on Russia have fueled brutal price volatility as oil has been one of its hardest trading periods, pushing volatility to historic lows. Despite ceasefire efforts, clashes continue. The spread of the deadliest coronavirus in China since the epidemic began is adding a new layer of uncertainty.
Brent crude hit $ 140 a barrel earlier this month, falling sharply below $ 100 this week. The liquidation limit is reflected in the open interest figures. Holdings in oil futures on major Brent and WTI contracts have fallen to their lowest levels since 2015.
The Kremlin's remarks came after Russia's chief negotiator Vladimir Medinsky reported "some progress" in the talks, but warned that some issues had not been resolved. Russian Foreign Minister Sergei Lavrov said there was a possibility of reaching an agreement with Ukraine, but that the talks would not be easy.
Since Wuhan two years ago, China has had relatively little success in mitigating disruption by quickly bringing virus cases under control. Now, the geographical spread of infections and Omicron's high transmission capacity are challenging its COVID Zero strategy. Meanwhile, the US Federal Reserve is expected to begin tightening monetary policy from Wednesday, adding to bearish sentiment.
Separately, the American Petroleum Institute reported last week that US crude reserves had risen by 3.75 million barrels, while Cushing's inventories had risen by 2.3 million barrels, according to statistics. The Energy Information Administration will report official figures on Wednesday.
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Courtesy Grizler.com
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