SULAIMANI (ESTA) — Oil prices edged up on Wednesday after Moscow said peace talks with Ukraine had hit a dead end, fuelling supply worries, while weak economic data from China and Japan kept a lid on gains.
Brent crude rose 22 cents to $104.86 a barrel at 0626 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 8 cents to $100.68 a barrel, after dropping earlier in the session.
The benchmarks had surged more than 6% on Tuesday.
“The downside for oil prices is limited,” Reuters quoted OANDA senior market analyst Jeffrey Halley as saying. He referred to peace talks hitting a dead end and comments from U.S. President Joe Biden accusing Russia of genocide.
These “are reinforcing that the Ukraine Russia situation will not be de-escalating anytime soon”, he continued.
Putin on Tuesday blamed Ukraine for derailing peace talks, and said Moscow would not let up on what it calls a “special operation” to disarm its western neighbor.
Reports this week of partial easing of some of China’s tight COVID-19 lockdown measures also underpinned oil prices, Reuters reported.
There was optimism that with China lockdowns slowly easing in some areas, fuel demand would rebound, Reuters cited Tina Teng, an analyst at CMC Markets, as saying.
However, weak economic data from China and Japan capped oil price gains.
China’s crude oil imports slipped 14% from a year earlier, extending a two-month slide, as strict COVID curbs hit demand in the world’s top crude importer.
Japan reported its biggest monthly fall in core machinery orders in nearly two years in February, dragged down by a steep drop in demand from IT and other service firms.
