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Oil prices rise on tight supply outlook as Russia spurns peace talks -Breaking

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© Reuters. Pictured at Inglewood Oilfield, which is the biggest urban oilfield in America, are active pumpjacks working from oil wells. They were taken from Baldwin Hills Scenic Overlook, Culver City (California), U.S.A, March 10, 2022. Picture taken March 10, 2022. REUTERS/Bing

Sonali Paul

(Reuters) – Oil prices rose on Wednesday due to concerns that Russia’s declining output, second largest oil exporter and most severely affected by sanctions, might cause a tightening of supply. This is after Moscow declared peace negotiations to end its invasion in Ukraine dead.

The futures gained 0.6% or 59 Cents to $105.23/barrel at 0053 GMT. U.S. West Texas Intermediate(WTI) crude oil futures increased 60 cents to $101.20/barrel. Both futures surged by over 6% during the session before.

Russian President Vladimir Putin blamed Ukraine Tuesday for stalling peace negotiations and stated that Moscow will not relent on its “special operation” of disarming its west neighbour.

Russian President Vladimir Putin stated that peace negotiations with Ukraine were ‘at an end’ while suggesting that the seven-week offensive will go according to plan. “This raises concerns about the continued risk of disruptions to the oil market,” ANZ’s oil analysts stated in a note.

According to data, Russian oil and condensate production fell below 10,000,000 bpd Monday. This was due to sanctions placed by several countries following Russia’s invasion of Ukraine. Also, logistical restrictions hamper trade.

Nikolai Shulginov, Energy Minister, said Tuesday night that Russia was ready to sell oil to any country in the world. He also said that Moscow is focused on maintaining the functioning of the oil industry. Interfax reported.

Some market players have noticed a rise in bullish sentiment this week due to reports of some partial lifting of China’s COVID-19 lockdowns.

However, U.S. fuel consumption appeared strong as data from the industry showed that gasoline stock fell by 5.1million barrels, and distillate stock fell by 5million barrels. These figures were cited by market sources, who referred to American Petroleum Institute numbers.

Analysts polled at Reuters were surprised by the magnitude of these declines.

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