Oil prices rose on Wednesday on concerns that falling output in sanctions-hit Russia, the world’s second-largest oil exporter, may limit supply, following Moscow’s announcement that peace negotiations to stop its invasion of Ukraine had reached a stalemate.
At 0053 GMT, Brent crude prices were up 59 cents, or 0.6 percent, to $105.23 a barrel, while U.S. crude futures were flat. Futures for West Texas Intermediate (WTI) crude rose 60 cents, or 0.6 percent, to $101.20 a barrel. The previous session saw both contracts rise by more than 6 precent.
On Tuesday, Russian President Vladimir Putin criticised Ukraine for the breakdown of peace talks and stated that Moscow will not abandon its ‘special operation’ to disarm its western neighbour.
‘Peace talks with Ukraine are ‘at a stalemate,’ according to Russian President Vladimir Putin, who also claims that the seven-week onslaught is going according to plan. This raises the possibility of further supply disruptions in the oil market,’ in a note, ANZ energy experts wrote.
According to those acquainted with the statistics, Russian oil and gas condensate production fell below 10 million bpd on Monday, the lowest level since July 2020, as a result of sanctions imposed by numerous nations after Russia invaded Ukraine and logistical difficulties, which hampered commerce.
According to Interfax news agency, Russia’s Energy Minister Nikolai Shulginov said late Tuesday that the government was willing to sell oil and oil products to ‘friendly countries in whatever price range,’ adding that Moscow was focused on securing the oil industry’s continued operation.
Meanwhile, indications of a partial relaxation of some of China’s strict COVID-19 restrictions have fueled optimistic optimism among some market participants this week.
Meanwhile, industry statistics revealed that gasoline supplies declined by 5.1 million barrels and distillate stocks fell by 5 million barrels, according to market sources quoting American Petroleum Institute estimates.
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