Oil prices steadied on Wednesday after retreating more than 3% in the previous session amid the easing of Russia-Ukraine tensions against the tense balance between investors’ tight global supply and revived fuel demand.
Brent was down 10 cents at $93.19 at 0253 GMT, after falling 3.3% overnight after Russia announced it was partially withdrawing its troops near Ukraine.
West Texas Intermediate (WTI) crude also held steady and was at $92.13 as of 0247GMT after the contract ended Tuesday’s session down 3.6%.
As the global demand recovery from the COVID-19 pandemic strains supply, both indicators hit their highest levels since September 2014 on Monday, with Brent reaching $96.78 and WTI $95.82. Brent’s price rose 50% in 2021, while WTI rose 60%.
Russia reported the partial withdrawal of its troops near Ukraine. On Tuesday, Russia’s defense ministry’s announcement that some troops had returned to base after the exercises, draw a picture that triggered profits in oil and showed a recovery in Wall Street and European stock markets
Aside from Ukraine tensions, analysts say the oil market remains tight and prices are still on track to move towards $100 a barrel, but it could return to $90 on profit selling.
However, as the economy is back on track and more demand is seen in the tight market, prices should rise towards $100.
After a four-hour meeting with Vladimir Putin and German Chancellor Olaf Scholz it was seen that there were more opportunities for diplomacy between Russia and Ukraine. The talks bolstered market expectations that an imminent Russian invasion seemed less likely.
The US Department of Labor reported that producer prices rose the most in eight months in January. This means that high inflation may continue for most of this year.