Oil prices tumbled more than 6% on Tuesday to their lowest in almost three weeks, as as traders worried growing pandemic lockdowns in China could dent demand and Russia suggested it would allow a revival of the Iran nuclear deal to go forward.
Both Brent and West Texas Intermediate (WTI) crude futures benchmarks settled below $100 per barrel for the first time since late February.
Since reaching 14-year highs on March 7, Brent has slid nearly $40 and WTI more than $30. Trading has been extremely volatile since Russia invaded Ukraine more than two weeks ago.
During the session, Brent futures plummeted $6.99, or 6.5%, to settle at $99.91 a barrel. WTI crude fell $6.57, or 6.4%, to settle at $96.44 a barrel. Brent fell as low as $97.44 and WTI hit $93.53, their lowest since February 25.
Close to Oversold Territory
On technical charts, both contracts moved the closest to oversold territory since December. They had been in overbought conditions during early March. Brent at one point topped $139 a barrel.
Russia is the world’s largest exporter of crude and fuels. Numerous buyers have shunned Russian oil since the invasion, sparking fears of a disruption of millions of barrels of daily crude supply. Those fears now look overdone.
On Tuesday a Ukrainian negotiator said talks with Russia over a ceasefire and withdrawal of Russian troops from Ukraine are ongoing. The ensuing sell-off drove prices lower but many expect volatility to continue.
Also on Tuesday, Russia said it has written guarantees it can carry out its work as a party to the Iran nuclear deal, suggesting Moscow would allow a revival of the 2015 pact to go ahead.
The talks to revive the nuclear accord could lead to the lifting of sanctions on Iran’s oil sector and allow Tehran to resume crude exports. They had stalled because of Russian demands.
- Reuters, with additional editing by George Russell