Oil prices rebounded on Wednesday as investors looked into conflicting statements about the possible withdrawal of some Russian troops from Ukraine amid tightening global supplies and a recovery in fuel demand.
Brent crude was up $ 1.89, or 2 percent, at $ 95.18 a barrel, down 3.3 percent overnight after Russia announced a partial withdrawal of troops from Ukraine.
US crude for West Texas Intermediate (WTI) traded up $ 1.59, or 1.7%, at $ 93.66 a barrel, after closing Tuesday’s close at 3.6%.
Both benchmarks reached their highest level since September 2014 on Monday, with Brent reaching $ 96.78 and WTI reaching $ 95.82.
The price of Brent jumped 50% in 2021, while the WTI rose by about 60%, due to the global recovery in demand following the COVID-19 pandemic reduction commissions.
For their part, futures for April delivery gained 9.5% to $ 4,717 per million thermal units, a three-week high. “The weather forecast is colder than expected and because of the snow and cold we had last week, there is a lot of talk that gas production will be lower,” said Phil Flynn, senior market analyst at The Price Futures Group.
Moscow announced a partial withdrawal of troops from the Ukrainian border, but NATO Secretary-General Jens Stoltenberg said on Wednesday that the alliance had seen no de-escalation and that Russia was continuing its military build-up. “The risk of a full-scale invasion has eased a bit. But it is unlikely that we will escape the current status quo,” said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo.
Despite tensions in Ukraine, the oil market remains tight and prices could still reach $ 100 a barrel.
“The market remains extremely tight and prices were on an upward trajectory before the escalation. The easing of tensions may have simply delayed the move to $ 100,” said Craig Erlam, senior market analyst at OANDA.
Investors were expecting weekly US oil data from the Energy Information Administration. U.S. crude and spirits inventories could have shrunk by 1.5 million to 1.6 million barrels last week, according to a Reuters poll. Figures from the American Petroleum Institute showed a drop in inventories last week, according to market sources.
Source: Capital
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