Global oil prices extended their declines on Monday, largely on the back of diplomatic efforts to end the ongoing war in Ukraine. Sources from the two sides said negotiators are showing willingness to discuss the situation and possibly proffer a solution, Investors King has learnt.
Brent crude oil, the international benchmark for Nigerian oil, shed over $3 to $109.37 per barrel on Monday at 9:55 am Nigerian time. While the U.S West Texas Intermediate oil dipped about $4 to $102.87 a barrel.
Panic buying had bolstered crude oil price to a record-high after Russia invaded Ukraine on February 24, 2022. Energy traders were concerned a series of sanctions imposed on Russia could disrupt the global oil supply and further push crude oil prices to $200 a barrel.
However, on Sunday, a U.S. Deputy Secretary of State Wendy Sherman said Moscow was showing signs it was ready to talk over the ongoing war in Ukraine. On the other hand, Mykhailo Podolyak, a Ukrainian negotiator also said Moscow was “beginning to talk constructively,” a sign the two sides could reach some sort of agreement this week.
“Oil prices might continue moderating this week as investors have been digesting the impact of sanctions on Russia, along with parties showing signs of negotiation towards ceasing fire,” said Tina Teng, an analyst at CMC Markets.
Also, commodities investors are pricing in the possibility of the Federal Reserve raising rates this week, this they expect to strengthen the U.S Dollar and pressure commodities prices.
“As markets had priced in for a much tighter supply from February to early March, the focus is shifting to the monetary policy in the upcoming FOMC meeting this week, which could strengthen the USD further, and pressuring on commodity prices,” Teng added.