Brent ended down 2.00% at $110.23 and WTI ended down 1.62% at $104.24.
Oil prices ended in the red on Tuesday for the second session in a row, dragged down by the progress announced in the negotiations between Ukraine and Russia, but also because of the confinements in China.
The barrel of Brent from the North Sea, the European benchmark, for delivery in May, fell 2.00% to 110.23 dollars.
The barrel of American West Texas Intermediate (WTI) for delivery the same month lost 1.62% to 104.24 dollars, after briefly falling back below the symbolic threshold of 100 dollars.
“The first meeting in two weeks between Russia and Ukraine to discuss peace has affected market sentiment,” Rystad Energy’s Vinicius Romano said, as Russia pledged to “significantly reduce” activities soldiers in the Ukrainian capital, kyiv.
The head of the Russian delegation, Vladimir Medinski, reported “substantial discussions” after a new round of Russian-Ukrainian talks in Turkey.
“This is the first time in this conflict that we see indications of any softening of military action on the Russian side,” Bjarne Schieldrop, an analyst at SEB, told AFP.
The conditions are now “sufficient” for a first meeting between Ukrainian President Volodymyr Zelensky and his Russian counterpart Vladimir Putin since the start of the Russian invasion on February 24, the chief Ukrainian negotiator also said on Tuesday.
Black gold prices fell sharply during the day in the face of this good news, losing up to 5%, but they regained some ground once the wind of optimism died down, in particular when the President American Joe Biden said Westerners are waiting to see if Russia “keeps its word” on reducing its military activity.
For Craig Erlam, analyst at Oanda, the progress of the negotiations notably removes the specter of a European embargo on Russian hydrocarbons, thus allaying fears about the supply of black gold.
Meanwhile, the lockdown of half of Shanghai, combined with rising Covid-19 cases in China, has rekindled fears that the new health crisis is spreading and further weighing on Chinese oil demand, Ipek said. Ozkardeskaya, analyst for Swissquote bank.
Shanghai, a metropolis of 25 million inhabitants, has become in recent days the Chinese epicenter of a new wave of contamination, linked to the Omicron variant.