The price of oil has swung wildly these past few weeks to reach a new high of $95 per barrel amid increasing tensions over Ukraine.
Crude prices closed down 3.6 per cent after falling nearly $5 per barrel during Tuesday trading sessions as Russia said some troops are starting to return to their permanent bases, easing geopolitical tensions that previously rallied prices, Bloomberg reported.
Russia, after a buildup of some 130,000 troops to the north, east and south of Ukraine, has declared the pullback of troops after exercises, without mentioning how many units were being withdrawn.
“While the US had earlier warned an invasion could be imminent, Russia’s President Vladimir Putin said talks with German Chancellor Olaf Scholz were business-like and could be the basis of further discussions.
“Moscow has repeatedly denied it has plans to attack. Still, NATO Secretary General Jens Stoltenberg said it was yet to see any signs of a reduced Russian presence along the border with Ukraine.
The market is hanging on every word in the standoff, with everything from natural gas and metals to global equities reacting to Russia’s comments about the pullback of troops on Tuesday,” Bloomberg reported.
The New York-based media company added that supplies have been increased to benefit from higher prices.
“Falling stockpiles have also been a major driver of recent gains, and late on Wednesday the industry-funded American Petroleum Institute was to issue estimates for changes in US holdings.
“US producers are ramping up supplies to take advantage of higher prices. Production from America’s Permian Basin rose to a record for a third month in a row in January, topping five million barrels a day, according to data from the Energy Information Administration,” Bloomberg said.
Based on these fundamentals, investors may pay attention to this week’s oil trading range of $90 to $100 per barrel.