Oil fell into negotiations to end the Ukrainian war, prior to the Fed’s meeting

On March 4, 2013, a customer fills a car with diesel at a gas station in Nice.Reuters / Eric Gaillard

Sign up now for unlimited free access to Reuters.com

  • Oil prices drop by $ 4 per barrel
  • Oil may continue to ease and focus shifts to Fed meetings-analysts
  • The surge in COVID cases in China, a major oil consumer, has also raised demand concerns-analysts.

Beijing, March 14 (Reuters)-Oil prices fell $ 4 a barrel on Monday as diplomatic efforts to end the war in Ukraine accelerated and markets prepared for rising US interest rates.

Brent crude oil futures fell by $ 3.81 (3.4%) at the end on Monday at 0741 GMT to $ 108.86 a barrel.

Crude oil futures at West Texas Intermediate (WTI) were down $ 3.85 (3.5%) to $ 105.48.

Sign up now for unlimited free access to Reuters.com

Both contracts have surged since Russia’s invasion of Ukraine on February 24, up about 40% over the past year.

Ukrainian and Russian negotiators will discuss again via videolink on Monday after both sides have quoted progress.read more

Negotiators gave the brightest assessments after the weekend negotiations, suggesting that positive results could be achieved within a few days.read more

U.S. Secretary of State Wendy Sherman said on Sunday that Russia is showing signs that it may be willing to negotiate substantively over Ukraine, and Ukrainian negotiator Mikairo Podryak said Russia was “constructing.” I’m starting to talk to you. ”

Russia’s invasion, which Moscow calls a “special operation,” has driven the energy market globally.

“Oil prices have fallen again this week as investors have digested the effects of sanctions on Russia and political parties are showing signs of negotiations to stop the fire,” said Tina Ten, an analyst at CMC Markets. We may continue. “

“The market was pricing a much tighter supply from February to early March, so monetary policy could shift to monetary policy at this week’s FOMC meeting, further strengthening the US dollar and squeezing commodity prices,” Ten said. There is sex. “

The US Federal Open Market Committee will meet on March 15-16 to decide whether to raise interest rates.

U.S. consumer prices soared in February, leading to the largest annual inflation rise in 40 years, set to accelerate as Russia’s war with Ukraine pushes up the cost of crude oil and other commodities. ..read more

The Federal Reserve will begin raising interest rates this week, which will put downward pressure on oil prices. Oil prices are usually inversely proportional to the US dollar, and stronger greenbacks make commodities more expensive for foreign currency holders.

Brent already lost 4.8% last week and WTI in the US fell 5.7%, both recording a weekly sharp decline since November. Oil imports.

The United States later announced a ban on Russia’s oil imports, and the United Kingdom announced that it would be phased out by the end of the year. Russia is the world’s largest exporter of crude oil and petroleum products, shipping about 7 million barrels per day, or 7% of the world’s supply.

“The situation in Russia and Ukraine is very fluid and the market will be sensitive to trends in this area. The parties may be willing to negotiate,” said Warren Patterson, head of commodity research at ING. The suggestion that it couldn’t do so would weigh some on the price. “

“In addition, the increase in COVID cases in China raises concerns about demand. China has seen the worst COVID outbreaks in more than two years. Shenzhen is closed and other cities are subject to strict regulations. I am. “

In China, the world’s largest importer of crude oil and the second largest consumer after the United States, highly contagious variants of Omicron have spread to more cities, causing an epidemic from Shanghai to Shenzhen, resulting in COVID-19. The number of cases is increasing rapidly.

Its daily new number reached a two-year high, with 1,437 newly confirmed coronavirus cases reported on March 13.read more

Although the number of cases in China is much lower than in many other countries, its “zero corona” stance has forced government authorities in affected areas to impose targeted blockades, conduct mass trials, and schools. We are closing down and shutting down public transportation to control the infection as soon as possible. ..read more

Sign up now for unlimited free access to Reuters.com

Additional report by Stephanie Kelly of New York, edited by Edwina Gibbs and Jacqueline Wong

Our Criteria: Thomson Reuters Trust Principles.


About the author


Leave a Comment