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Oil drops on China demand worries, Ukraine peace talk hopes -Breaking

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© Reuters. FILE PHOTO: Storage tanks are seen at Marathon Petroleum’s Los Angeles Refinery, which processes domestic & imported crude oil into California Air Resources Board (CARB), gasoline, diesel fuel, and other petroleum products, in Carson, California, U.S., Ma

MELBOURNE, (Reuters) – Futures fell in the early trading session Tuesday morning. This was due to the possibility of a drop in fuel demand after Shanghai closed down to stem a rise in COVID cases. Meanwhile, Russia and Ukraine headed towards peace negotiations.

U.S. West Texas Intermediate crude oil futures (WTI), fell to $103.46 per barrel within minutes of opening. They were then down $2.09 or 2% at $103.87 GMT after falling about 7% Monday.

The futures are expected to open $3 below the prior session, even though they had dropped around 7%.

On Tuesday, Russia and Ukraine were due to meet in Istanbul for the first time in more than two weeks. Russia’s invading invasion of Ukraine prompted sanctions to reduce oil supply. Prices reached 14-year highs earlier this month due to these sanctions.

Russia considers its actions against Ukraine an “special operation” in disarming the neighbor.

Shanghai’s nine-day lockdown, which lasted two days and was held in three stages over the past nine days has been countered by concerns about low supply. It is anticipated to impact fuel demand, China’s biggest oil importer. According to analysts at ANZ Research, the country’s financial center accounts for approximately 4% of China’s oil consumption.

Baidu’s traffic data (NASDAQ:) shows that peak morning traffic was reduced by 45% because workers stayed at home, ANZ analysts stated in a note.

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