Oil prices steadied on Wednesday after retreating more than 3 percent in the previous session, as investors assessed the impact of easing tensions between Russia and Ukraine and a tense balance between tight global supplies and a recovery in fuel demand.
Brent crude was trading at $93.19 a barrel at 0253 GMT, down 10 cents, down 3.3% overnight after Russia announced a partial withdrawal of troops near Ukraine, but remains to be verified by the United States.
U.S. West Texas Intermediate (WTI) crude was also steady at 0247 GMT, last trading at $92.13, after the contract closed down 3.6% on Tuesday.
Both benchmarks hit their highest levels since September 2014 on Monday, with Brent at $96.78 and WTI at $95.82. Brent is up 50% in 2021, while WTI has surged about 60% as global demand recovers from the COVID-19 pandemic and supplies tighten.
On Tuesday, a video released by the Russian Defense Ministry showed some troops would return to base after the drills, a move that sparked profit-taking in oil and a rebound in Wall Street and European stocks.
But analysts said that aside from the Ukrainian tensions, the oil market remained tight, with prices still heading towards $100 a barrel.
“Technically, we could see prices recover to $90 a barrel due to profit-taking, but move toward $100 as the economy gets back on track and more demand emerges in a tight market,” the chief executive said. Investment officer Jonathan Barratt said. Officers of the Probis Group.
German Chancellor Olaf Schultz said on Tuesday he saw room for more diplomacy to avoid war between Russia and Ukraine after four hours of talks with President Vladimir Putin.
“The talks between German Chancellor Scholz and President Putin have supported market expectations that an imminent Russian invasion appears less likely,” said Edward Moya, senior market analyst at brokerage OANDA.
Despite the brewing crisis in Ukraine, the U.S. Labor Department reported that producer prices rose by the most in eight months in January, a reminder that high inflation is likely to persist through much of the year.