Oil prices fell as much as $4 a barrel Monday as diplomatic efforts to end the war in Ukraine showed more positive signs. Meanwhile, the market is reacting to higher U.S. inflation.
- Brent crude fell $3.05, or 2.7%, at $109.62 a barrel.
- WTI crude fell $3.10, or 2.8%, to $106.23 a barrel.
On Sunday (24), U.S. Deputy Secretary of State Wendy Sherman said Russia was showing signs that it might be ready for important talks on Ukraine. A Ukrainian negotiator said, “Russia is starting to talk constructively. The invasion of Russia, which Moscow called a ‘special military operation,’ has affected the global energy market.”
U.S. consumer price index rises 7.9% in February, remaining at its highest level in 40 years. It is expected to accelerate further as Russia’s war with Ukraine has pushed up the cost of crude oil and other commodities.
The U.S. Federal Reserve Board will meet on March 15-16 to decide whether to raise interest rates.
The Federal Reserve is expected to begin raising interest rates this week. With this measure, the Fed hopes to curb inflation, which has gotten out of hand.
Brent lost 4.8% and U.S. WTI 5.7% last week, the largest weekly decline since November. Prior to this, prices had risen to highs dating back to 2014 and were severely overheated. This also led to a significant increase in fuel prices worldwide.
The U.S. announced a ban on imports of Russian oil, and the United Kingdom said it would stop importing oil by the end of the year. Russia is one of the world’s largest exporter of crude oil and oil products. The country supplies about 7 million barrels a day, or 7% of the world’s supply.
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Monday, March 14, 2022