SULAIMANI (ESTA) — Oil prices clawed back heavy losses to rise more than 2% on Wednesday on supply tightness and the growing prospect of new Western sanctions against Russia even as signs of progress emerged from peace talks between Moscow and Kyiv.
Brent crude futures were up $1.79 at $111.9 by 1041 GMT, reversing a 2% loss in the previous session.
U.S. West Texas Intermediate (WTI) crude futures rose $1.90 to $106.1 a barrel, erasing a 1.6% drop on Tuesday.
“We would see an additional 1 million barrels per day of Russian production at risk if relations with Europe worsen and an oil embargo is put in place, although we still see this as unlikely,” Reuters quoted consultancy JBC Energy as saying.
“The United States and its allies are planning new sanctions on more sectors of Russia’s economy that are critical to sustaining its invasion of Ukraine, including military supply chains.”
The market saw a sharp sell-off in the previous session after Russia promised to scale down military operations around Kyiv, but reports of attacks continued.
Commonwealth Bank analyst Tobin Gorey said in a note that the price recovery “suggests the oil market, at least, has a strong degree of scepticism about any ‘progress’,” according to Reuters.
