Oil pulls back from $100 amid report ‘Putin is open to talks’

Bloomberg

Oil extended its retreat from a seven-year high, slipping back below $100 a barrel in London, as Russia’s invasion of Ukraine forced traders to grapple with a fluid market environment.
Brent futures rallied above $105 a barrel as Russia launched an attack on its neighbour, though prices subsequently retreated as it emerged that Western governments wouldn’t impose sanctions on energy exports. The pullback continued amid reports that President Vladimir Putin is open to sending a delegation to Minsk for peace talks with Ukraine.
Still, buyers like China have briefly paused purchases of Russia’s flagship Urals grade on concern that the rupture in international relations may yet complicate dealings with Moscow.
The US imposed its toughest-ever sanctions on Russia as tanks and troops moved closer to the Ukrainian capital, but said restrictions on currency clearing would include carve-outs for energy payments, a crucial source of revenue for Moscow. US President Joe Biden said Russia will not be barred from the Swift international banking network because Europe opposed that action.
Brent for April settlement fell 1.4% to $97.72 a barrel in London. It closed up 2.3% in the previous session, after it peaked at a seven-year high of $105.79 earlier. WTI for April was down 1% at $91.93 after settling 0.8% higher.
Russia’s invasion of Ukraine has spooked a global oil market that was already perilously tight due to the inability of supply to keep up with the demand recovery from the pandemic.
Japan and Australia have indicated they may be part of an international release, but China said it had no immediate plans to intervene in oil markets. A spokesperson for Beijing said it would only consider such a move when the geopolitical situation had stabilised. South Korea said it was preparing to take action if there’s a disruption to energy shipments.
Oil stockpiles at Cushing, Oklahoma, continued to slide, falling to the lowest since September 2018, according to data. Inventories at the hub are fast approaching critical levels and could set the stage for a further run-up in futures.
There is a risk oil will rise to $125 a barrel should demand destruction be required to balance the market, Goldman Sachs Group Inc said in a note.