New York (CNN Business) US oil prices fell briefly under $ 100 per barrel on Tuesday but losses were proven shortly when investors tried to understand the latest diplomatic developments in the war in Ukraine.
Sellloff started after Russia showed it would have been tanned the attack in the section of Ukraine, reducing fear of energy supply.
After peace talks between Russia and Ukraine on Tuesday, Russia said it would “reduce drastically” her military attacks in the cities of Ukraine in Kyiv and Chernihiv.
US oil fell by 7% to a low of $ 98.44 per barrel on Tuesday morning. Brent, world benchmark, dropped to as low as $ 104.84 per barrel, a decrease of almost 7%.
However, at the end of the US oil day fell by only 2%, settled $ 110.23 per barrel. Brent fell 1.6% to $ 104.24 per barrel.
Rebound from the lowest position that day reflects uncertainty over the next steps in the war and skeptics that Russia will back up his words with action.
“People come to their common sense,” said Robert Yawger, Vice President of Energy futures in Mizuho Securities. “There is this awareness yet over. It’s far from above.”
The US Defense Department warned Tuesday afternoon that while “a small number” of Russian troops had moved from Kyiv, Russia could still cause “massive brutality” in the city.
“We believe that this is a reposition, not a real withdrawal,” said the Pentagon Press Secretary John Kirby at the press briefing.
Andy Lipow, President of Lipow Oil Associates, said the market had interpreted the latest headline about Russian-Ukrainian negotiations as “step towards a ceasefire.”
However, investors have learned to treat comments from officials in Russia with a dose of skepticism.
“You can easily take this to mean Russia just pulls back to regroup and try it again,” Yawger said. “I won’t trust them.”
Even if the ceasefire is finally reached, supply disorders may linger. The war has done great damage to Russia in the Energy Ecosystem.
“I hope the sanctions and desires of the oil industry to stay away from Russian inventory will be with us for decades,” Lipow said.
Oil prices fell on Monday about fears that locking in Shanghai would cut Chinese energy demand.