Oil prices steady as Ukraine tensions cool

Published On: February 16, 2022Categories: Alternative Investments1.3 min read

Brent traded at $93.19 a barrel, down 10 cents, and U.S. WTI crude also held steady and last traded at $92.13

Oil prices steadied on Wednesday after retreating more than 3% in the previous session as investors gauged the impact of easing Russia-Ukraine tension against a taut balance between tight global supplies and recovering fuel demand.

Brent traded at $93.19 a barrel at 0253 GMT, down 10 cents, having dropped 3.3% overnight after Russia announced a partial pullback of its troops near Ukraine, yet to be verified by the United States.

U.S. West Texas Intermediate (WTI) crude also held steady and last traded at $92.13 at 0247GMT, after the contract ended Tuesday’s session down 3.6%.

Both benchmarks had hit their highest since September 2014 on Monday, with Brent touching $96.78 and WTI reaching $95.82. The price of Brent climbed 50% in 2021, while WTI soared about 60%, as a global recovery in demand from the COVID-19 pandemic strained supply.

On Tuesday, the Russian defence ministry published footage to show it was returning some troops to base after exercises, a move that triggered profit-taking in oil as well as a rebound in the Wall Street and European stock markets.

But beyond the Ukraine tension, the oil market remains tight and prices are still on course for a move towards $100 a barrel, analysts said.

Technically we could see prices heading back to $90 a barrel on profit-taking, but they will trend higher towards $100 as the economy is getting back on track and more demand is coming through in a tight market, said Jonathan Barratt, chief investment officer at Probis Group.

Talks between German Chancellor Scholz and President Putin supported market expectations that an imminent Russian invasion seems less likely, said Edward Moya, senior Market Analyst with brokerage OANDA.

About the Author: Jonathan Adams

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