Oil continued to decline and is close to the level before the Russian invasion of Ukraine

Oil prices continued to slide on Wednesday and are close to their pre-Russian invasion of Ukraine levels, weighed down by fears of falling demand for black gold and optimism about ongoing talks between Moscow and kyiv.

At the end of a very volatile day, the barrel of Brent from the North Sea for delivery in May lost 1.89% to 98.02 dollars.

While the West Texas Intermediate (WTI) for April fell 1.49% to 95.04 dollars.

The benchmark two barrels are thus below $100 and close to their pre-invasion levels in late February and subsequent Western sanctions against Moscow that pushed black gold close to all-time highs.

"These movements are due to the hopes and expectations derived from the negotiations between Russia and Ukraine"summed up Matt Smith, head of oil analysis at Kpler.

New talks between kyiv and Moscow were described by Ukrainian President Volodimir Zelensky as "more realistic"although Russia continues to advance on the ground.

Kremlin spokesman Dmitri Peskov said on Wednesday that negotiators discuss "A commitment" that would make Ukraine a neutral country on the model of Sweden or Austria.

– "Prudence" –

Given the drop in prices, "investors seem to put a lot of emphasis on these neutrality plans, although I would advise extreme caution on this issue"warned analyst Smith.

According to this specialist, crude oil prices will rise again due to a lack of supply.

"In theory, there will be a lack of supply in the next two weeks"Held.

The International Energy Agency (IEA) said on Wednesday that it fears a strong "impact" in the global supply of oil as a result of the sanctions against Russia for the invasion of Ukraine, and estimated that Russian oil cannot be replaced immediately.

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Russia is the second largest exporter of crude oil in the world.

For Stephen Brennock, from PVM Energy, there are other factors that drag oil, such as "the fears linked to covid-19 that return" or "hopes that an agreement will be reached in the negotiations on the Iranian nuclear (deal)".

China is facing its biggest covid outbreak since 2020 and a sanitary lockdown is in force in several cities, a measure that raises fears for its impact on Chinese economic growth and demand for black gold.

The obstacles to the reinstatement of the agreement on the Iranian nuclear program seem to dissipate.

The United States believes that a settlement is "next". This conclusion would lead to the lifting of sanctions against Iran, a founding member of the OPECand would allow it to fully recover its export capacity.

The data on crude oil inventories in the United States did not affect the market.

Commercial crude oil stocks in the United States rose sharply last week, contrary to market expectations, although gasoline stocks fell, according to figures released on Wednesday by the US Energy Information Agency (EIA).

In the week ending March 11, US crude stockpiles rose 4.3 million barrels (mb) to 415.9 mb, while analysts had expected a decline of 1.8 mb.

Gasoline reserves, meanwhile, fell more than expected, by 3.6 mb, while analysts expected a drop of 1.4 mb.

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