Crude Oil Climbed on Supply Tightness, Despite “Progress” in Russia-Ukraine Talks

Crude oil rebounded in Asian trading as investors are weighing the prospect for a de-escalation of Russia’s war in Ukraine.

WTI rose above $105 a barrel after loosing more than 8% over the previous two sessions, while Brent is trading around $111 a barrel.

Russia said it sharply call back military activity near Ukraine capital Kyiv and its chief negotiator said Moscow would take steps to “de-escalate” the conflict. The talks failed to reach agreement on a cease-fire, however, and the Pentagon said Kyiv remains under threat.

Tightness in the market is also observed amid fresh wave of COVID-19 in China as well increased tensions in the Middle East.

OPEC+ is set to meet on Thursday to discuss its supply plan for May and the group is expected to stick with its strategy of a modest output boosts.

“Oil markets remain tight,” Stephen Innes, managing partner at SPI Asset Management, said in a note. Cease-fire talks and Covid lockdowns continue to dominate the headlines, although there is an expectation that business closures in China may be short-lived, he added.

The American Petroleum Institute reported that U.S. crude inventories fell by 3 million barrels last week, according to people familiar with the figures. The Energy Information Administration will release official data later Wednesday.