By Barani Krishnan

Investing.com: Crude oil prices fell to a low of 2.2% on Tuesday, despite dubious Russian-Ukraine negotiations. This suggests only one thing: The rebound when it happens will be wild, just as the oil bull wanted.

The London-traded benchmark for oil prices, fell $2.25 or 2% to $110.23 per barrel. It dropped to $102.25 in the course of the session.

New York’s crude benchmark U.S. – WTI – settled lower at $103.24, or $1.72 (or 1.6%). WTI dropped below $100 to $98.58 earlier. This marked a nearly two-week low.

The slump followed Monday’s 7% drop in both crude benchmarks and reinforced the sheer volatility that has become the new normal for oil these days. It’s a phenomenon that appears encouraged by longs seeking to buy the dip in crude, to profit big-time later.

Ukrainian presidential advisor Mykhailo Podoliak said on Tuesday peace talks have been “successful enough” for a possible meeting between President Volodymyr Zelensky and his Russian counterpart Vladimir Putin. 

“We have documents prepared now which allow the presidents to meet on a bilateral basis,” he told CNN.

Russia’s top negotiator in the Ukraine crisis Vladimir Medinsky, meanwhile, told Moscow-based Tass news agency that de-escalation around the Ukraine capital Kyiv did not mean a ceasefire was in progress.

Reuters also quoted a Westen official, speaking anonymously, that “nothing we’ve seen so far has proven that Russia is really serious about peace negotiations, and it seems to be more of a tactical exercise to buy time.”

“The diplomatic language would be ‘it’s too early to tell’ but the reality is these guys are just jacking us around and oil bulls are only to happy with the upward swing in prices that’s likely to come from each dip,” said John Kilduff, partner at New York energy hedge fund Again Capital. 

“Just look at the trend: Monday through Wednesday are selloff days and Thursday-Friday are buyback days because no one is prepared to go short into the weekend, not knowing what could happen. The only guys winning are those playing the volatility.”

Few market participants expect that prices will remain low beyond Thursday’s OPEC+ monthly meeting. The strong 23-nation oil producer alliance has been determined to maintain prices at $100 or higher and has not allowed any additional barrels beyond its monthly increases of 400,000 barrels per daily in production since last year.

“Longer-term pressures remain and OPEC+ looks unlikely to do anything to alleviate those this week,” said Craig Erlam, analyst at online trading platform OANDA. 

While OPEC+ has repeatedly said it will remain “apolitical” and base its decisions purely on achieving a “balanced market”, Erlam said the reality suggested otherwise. 

“Given how unbalanced the market is and the fact that at the center of the alliance is the country to blame for the most recent surge in oil prices, it’s hard to view a decision to not increase output targets as anything but political.”

Apart from the Russia-Ukraine story, traders looked out Tuesday for U.S. weekly crude oil inventory data after settlement by the American Petroleum Institute or API.

At approximately 4:30PM ET (20:30 GMT), the API will publish a snapshot showing U.S. crude oil, gasoline and distillates closing balances for the week ending March 25, 2019. These numbers are used as an indicator of the official inventory data due by the U.S Energy Information Administration (USEIA) on Wednesday.

Analysts following Investing.com anticipate that the EIA will report a decline of 1.56million barrels for the week ending March 25. This is in addition to the 2.51 million drop reported for the week of March 18.

On the front, the consensus is for a draw of 1.9 million barrels over the 2.95  million barrels consumed in the previous week.

With , the expectation is for a drop of 1.67 million barrels versus the prior week’s slide of 2.1 million.