BEIJING- Oil prices shed as much as $4 a barrel on Monday, extending last week’s decline as diplomatic efforts to end the war in Ukraine were stepped up and markets braced for higher US rates.
Brent crude futures were last down by $3.05 or 2.7 percent at $109.62 a barrel on Monday.
US West Texas Intermediate (WTI) crude futures eased $3.10 or 2.8 percent to $106.23 a barrel.
Both contracts have surged since Russia’s Feb. 24 invasion of Ukraine and are up roughly 40 percent for the year to date.
Russia and Ukraine gave their most upbeat assessments after weekend negotiations, suggesting there could be positive results within days.
On Sunday, US Deputy Secretary of State Wendy Sherman said Russia was showing signs it might be willing to have substantive negotiations over Ukraine, even as Moscow was intent on “destroying” its neighbor while Ukrainian negotiator MykhailoPodolyak said that Russia was “beginning to talk constructively.”
Russia’s invasion, which Moscow calls a “special operation,” has roiled energy markets globally.
“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.
“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.
The US Federal Open Market Committee meets on March 15-16 to decide whether or not to raise interest rates.
US consumer prices had surged in February, leading to its largest annual increase in inflation in 40 years, and is set to accelerate even further as Russia’s war against Ukraine drives up the costs of crude oil and other commodities.
