Oil prices fell by as much as $4 a barrel on Monday, extending last week’s slide, as diplomatic efforts to end the war in Ukraine intensified and markets prepared for a hike in US interest rates.
And Brent crude futures fell in the latest trading by regarding $ 3.81, or 3.4 percent, to reach the price of a barrel of $ 108.86 at 0741 GMT Monday.
West Texas crude futures also fell by regarding $3.85, or 3.5 percent, to $105.48 a barrel.
Oil prices have risen by regarding 40% since the start of the Russian invasion of Ukraine on February 24.
Russian and Ukrainian officials are scheduled to hold a new negotiation session, Monday morning, in a more positive atmosphere than before, despite the expansion of the conflict in recent days to western Ukraine at the gates of NATO.
US Deputy Secretary of State Wendy Sherman said on Sunday that Russia was showing signs that it might be ready to conduct substantive negotiations on Ukraine, while Ukrainian negotiator Mikhailo Podolyak said Russia had “begin constructive talks.”
The Russian invasion disrupted energy markets worldwide.
“Oil prices may continue to fall this week as investors digest the impact of sanctions on Russia, along with the parties showing signs of negotiating a ceasefire,” said Tina Ting, an analyst at CMC Markets.
“With markets preparing for much lower supplies from February to early March, focus will shift to monetary policy at the upcoming FOMC meeting this week, which might boost the dollar further and put pressure on commodity prices,” Ting added.
The Federal Reserve is expected to raise interest rates at its meeting this week, in an attempt by itself and other central banks to rein in the highest rate of inflation in generations without causing a recession by raising interest rates too quickly or higher than necessary, according to the Associated Press.
The United States later announced a ban on Russian oil imports, and Britain said it would phase out them by the end of the year.
Russia is the world’s largest exporter of crude and oil products combined, shipping around 7 million barrels per day or 7% of global supplies.
“The situation between Russia and Ukraine is very fluid and the market will be sensitive to developments on this front. News of the negotiations is likely to affect prices to some extent,” said Warren Patterson, Head of Commodities Research at ING.
He added that the increasing cases of corona in China, the second largest consumer of oil, concerns regarding the demand for oil.
