Oil closed sharply lower this Wednesday (9) after strong increases in the previous session. The war in Ukraine remained in the focus of investors on Wednesday, amid a ceasefire to evacuate civilians and with nods from authorities for a solution to the conflict.
In addition, investors followed the emergency release of oil inventories and weekly data from the US Department of Energy (DoE).
On the New York Mercantile Exchange (Nymex), a barrel of WTI oil scheduled for delivery in April closed down 12.12% (US$ 15), at US$ 108.70. Brent for May lost 13.16% ($16.84) on the Intercontinental Exchange (ICE) at $111.14.
Oil futures contracts were up during the night, however, the commodity began to fall with the news that the International Energy Agency (IEA) reported that member states have already released 62.7 million barrels in an emergency from their stocks.
It then only accelerated the declines amid a ceasefire to allow residents to flee in the region surrounding Kiev, while investors monitored the prospects of dialogue for an eventual solution to the conflict.
The deputy chief of staff of the Ukrainian president, Ihor Zhokva, said that Ukraine is willing to discuss neutrality towards the North Atlantic Treaty Organization (NATO).
Oil even reduced losses with the DoE’s weekly report, which showed that oil inventories in the United States fell by 1.863 million barrels, to 411.562 million barrels, in the week ended March 4, but intensified the declines after the president Ukraine’s Volodymyr Zelensky said he was prepared to make concessions in order to end the war.
For Edward Moya of Oanda, in addition to Zelensky’s speech, oil prices have fallen as optimism grows that the economic impact of sanctions is weighing on the Russian economy, and that Russian President Vladimir Putin may try to avoid a long war.
According to Julius Baer, Moscow’s isolation leaves a gap in the oil market. “The world is not about to run out of oil. We are witnessing a price crisis and not a supply crisis”, he highlighted, in a report sent to clients.
Despite the drops on Wednesday, according to Rystad Energy, at worst, the price of a barrel of oil could reach US$ 240 by mid-year if Western countries adopt massive sanctions against Russian oil exports.
Source: CNN Brasil
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