BEIJING (Reuters) – Oil prices extended last week’s decline to fall by about $4 a barrel during early trade on Monday after a U.S. official said Russia was showing signs it might be willing to have substantive negotiations over Ukraine.
Brent crude futures was last down by $4.12 or 3.6% at $108.55 a barrel at 0115 GMT on Monday.
U.S. West Texas Intermediate (WTI) crude futures eased $3.93 or 3.7% to $105.40 a barrel.
Both contracts have surged since Russia’s Feb. 24 invasion of Ukraine and are up roughly 40% for the year to date.
On Sunday, U.S. Deputy Secretary of State Wendy Sherman said that Russia is showing signs it might be willing to have substantive negotiations over Ukraine, even as Moscow currently is intent on “destroying” its neighbor.Russia’s invasion, which Moscow calls a “special operation,” has roiled energy markets globally.
Brent lost 4.8% last week and U.S. WTI fell 5.7%, both posting their steepest weekly decline since November. That was after both contracts hit their highest levels since 2008 earlier in the week on supply concerns after the United States and European allies considered banning Russian oil imports.
While the U.S. later announced a ban on Russian oil imports and Britain said it would phase them out by year end, downward pressure on prices was fuelled by comments from a United Arab Emirates ambassador that the country supports production increases and would encourage OPEC to consider higher output.
OPEC+, or the Organization of the Petroleum Exporting Countries, Russia and their allies, have been struggling to meet existing output quotas due to low investment and a lack of spare capacity to further boost production.
“The U.S. ban on Russian crude oil imports saw prices initially rally sharply. However, without the Europeans joining the move, the risk of further tightness in oil markets was discounted,” said ANZ Research analysts in a note on Monday.
Russia is the world’s top exporter of crude and oil products combined, shipping around 7 million barrels per day or 7% of global supplies.
Talks between Russia and Ukraine are not taking place right now but will continue on Monday, Kremlin spokesperson Dmitry Peskov was quoted as saying on Sunday by the RIA news agency.
Peskov made the comments after Ukrainian presidential adviser Oleksiy Arestovych said Ukraine and Russia were actively conducting talks on Sunday.
(Reporting by Emily Chow in Beijing and Stephanie Kelly in New York; Editing by Edwina Gibbs)
