Amidst the Russia and Ukraine crisis and stringent lockdown imposed in China, the global crude oil prices suffered losses on Tuesday against the previous day. At 0940 AM, the May contract of Brent futures was at USD 102. 54, a downfall of 4.08% from the last close. West Texas Intermediate (WTI) fell below the USD 100 per barrel mark, with the April contract down 4.04% at USD 98.84.
The oil prices touched USD 140 a barrel, the highest in 14 years. While some analysts believe that the volatility is here to stay, with a possibility of costs going up to USD 200 a barrel as more Russian oil supplies go off the market by year-end as promised by the UK.
The spiking cases of COVID-19 in China have dampened the oil market. As a result, the authorities have imposed a lockdown on about 10 cities, including Shenzhen’s tech hub.
The oil prices had soared to near-record levels following Russia’s invasion of Ukraine, which has reduced over the past few days.
On March 7, Brent hit USD 139.13 a barrel, the highest since 2008.
Precariousness about the world economy may be resulting in an amalgamation of stagnant growth the high inflations caused due to the pandemic, Russia’s invasion, and China’s lockdown. These unfortunate incidents caused oil, wheat, and other commodities to soar.
Negotiators from Russia and Ukraine spoke over a video conference for a new round of talks after the two sides expressed willingness to lighten the situation. However, the words ended without a breakthrough after several hours. As a result, the negotiators took “a technical pause.” The negotiators are to meet again on Tuesday.
It was already an uneasy situation for the investors when the war broke out. As a result, the central banks around the globe are preparing to shut off the stimulus they pumped unto the global economy after the pandemic struck.
The Russia-Ukraine crisis has worsened the situation. It has pushed inflation by increasing prices for everything from crude oil to nickel. The problem has pulsed down the economic growth severely.