By Barani Krishnan

Investing.com — Don’t ever count the oil bulls out — not with Vladimir Putin around.

Crude futures flew back to above $100 per barrel levels on Thursday after a Kremlin spokesman described reports claiming solid progress in Russia-Ukraine talks as “wrong” and Putin himself vowed not to succumb to Western pressure in ceding Moscow’s invasion of Ukraine.

U.S. crude’s , or WTI, benchmark settled up $7.94, or 8.4%, at $102.98 a barrel. WTI dropped 13% during the three previous days before settling just below $95 on Wednesday.

The London-traded benchmark oil price settled at $106.64 per barrel, an $8.62 increase (8.8%). Brent lost 13% in the Tuesday-Wednesday slump and fell to $98 below the previous session.

“The West thinks we’ll take a step back, but the west doesn’t understand Russia,” Russia’s president Putin said, as U.S. officials pointed to intelligence showing Moscow extending its air and artillery campaign across the south of the country as well as moving reinforcements from the Far East and Caucasus. 

Meanwhile, Ukrainian officials reiterated that they wouldn’t consider giving up territory in order to stop the war. This is a crucial demand from Russia which seeks recognition for its 2014 annexation and support for breakaway republics in Ukraine. 

Ukrainian forces also carried out counter-offensives against Russian positions on Wednesday, seeking to inflict what one official called “maximum losses,” even as the invading Russian military stepped up its lethal attacks on cities.

The combination of the actions reversed the drop in crude oil prices caused by the belief that diplomacy was more effective between the sides than before.

WTI, Brent and Brent all fell below $100 Wednesday. This was the first such settlement since February 25, 25. Three-day decline was the greatest percentage market fall since crude prices collapsed in April 2020. This occurred when there was high demand for oil following the Covid-19 crisis. 

Thursday’s rebound was especially acute as Putin spoke.

The Paris-based International Energy Agency (or IEA) stated Wednesday that 3,000,000 barrels per day of Russian production may be shut down starting in April because of the difficulties of finding buyers.

Shell, a major Western oil company (LON:), has stated that it will no longer buy Russian crude. Many other buyers have begun to look for alternative sources of Russian oil to reduce the possibility of being infected by U.S. sanctions. Indian plans to trade in currencies other than dollars, however, are still very much in the embryonic stages. 

Russia’s push back against reports of substantial progress in ceasefire talks felt like “a real setback just as things appeared to be heading in the right direction (and) had allowed oil prices to fall considerably from the highs,” said Craig Erlam, analyst at online trading platform OANDA.

The IEA’s assessment of a 3.0-million barrels per day loss in Russian exports was also “far more than the lost demand growth” expected from higher crude prices, noted Erlam.