By Gina Lee

Investing.com – Oil was down on Tuesday morning in Asia, as Ukraine and Russia look to continue peace talks. The losses were also caused by fears that China’s COVID-19 lockdown could affect fuel demand.

By 12:25 ET (5:00 AM GMT), the price of $108.25 had dropped by 1.13% and $104.77 was down 1.12%. WTI and Brent contract lost about 7% Monday.

The Ukraine and Russia will hold peace talks with Turkey in the latter part of the day. It is the first such meeting in two weeks after Russia invaded Ukraine. Hiroyuki Kikukawa (general manager, research Nissan Securities) stated that oil prices have been under pressure because of expectations for a peaceful settlement between Russia and Ukraine. He also suggested that this could result in an easing or avoidance of Western sanctions against Russia.

“A successful ceasefire may also improve the prospects of reviving a Iranian nuclear agreement,” he said.

Fuel demand in China, the world’s largest oil importer, also remains a concern as the city of Shanghai remains under a two-stage, nine-day lockdown to curb rising numbers of COVID1-9 cases.

Tsuyoshi, NLI Research Institute’s senior economist, told Reuters: “Seller pressure grew due to concerns that China might impose additional restrictions in other locations to contain the pandemic. Fuel demand may further be reduced.”

He said that market volatility had made it more difficult for investors who are long-term, because short-term investors have a tendency to profit or reduce losses faster than ever before.

Reuters was also told by sources that the Organization of the Petroleum Exporting Countries (OPEC+), will meet Thursday. It will probably stick with its plans to increase oil production in May 2022. This is in spite of the escalating oil prices and the calls by the U.S., and other buyers to increase the supply.

While global demand has returned to pre-COVID-19 levels however, the market is still tight since OPEC+ has not been quick to restore the shortages enacted in the wake of the 2020 pandemic. Traders claim that U.S. oil imports increased after Russia’s invasion in Ukraine. According to traders barrels of U.S. crude oil are now being exported to the Gulf Coast instead of to Cushing (Oklahoma) storage center.

Investors will also be waiting on, due late in the afternoon.