AIRLINK 73.00 Decreased By ▼ -2.16 (-2.87%)
BOP 5.35 Decreased By ▼ -0.10 (-1.83%)
CNERGY 4.31 Decreased By ▼ -0.08 (-1.82%)
DFML 28.55 Increased By ▲ 0.91 (3.29%)
DGKC 74.29 Increased By ▲ 2.29 (3.18%)
FCCL 20.35 Increased By ▲ 0.06 (0.3%)
FFBL 30.90 Decreased By ▼ -0.15 (-0.48%)
FFL 10.06 Increased By ▲ 0.09 (0.9%)
GGL 10.39 Increased By ▲ 0.12 (1.17%)
HBL 115.97 Increased By ▲ 0.97 (0.84%)
HUBC 132.20 Increased By ▲ 0.75 (0.57%)
HUMNL 6.68 Decreased By ▼ -0.19 (-2.77%)
KEL 4.03 Decreased By ▼ -0.17 (-4.05%)
KOSM 4.60 Decreased By ▼ -0.17 (-3.56%)
MLCF 38.54 Increased By ▲ 1.46 (3.94%)
OGDC 133.85 Decreased By ▼ -1.60 (-1.18%)
PAEL 23.83 Increased By ▲ 0.43 (1.84%)
PIAA 27.13 Decreased By ▼ -0.18 (-0.66%)
PIBTL 6.76 Increased By ▲ 0.16 (2.42%)
PPL 112.80 Decreased By ▼ -0.36 (-0.32%)
PRL 28.16 Decreased By ▼ -0.59 (-2.05%)
PTC 14.89 Decreased By ▼ -0.61 (-3.94%)
SEARL 56.42 Decreased By ▼ -0.91 (-1.59%)
SNGP 65.80 Decreased By ▼ -1.19 (-1.78%)
SSGC 11.01 Decreased By ▼ -0.16 (-1.43%)
TELE 9.02 Decreased By ▼ -0.12 (-1.31%)
TPLP 11.90 Decreased By ▼ -0.15 (-1.24%)
TRG 69.10 Decreased By ▼ -1.29 (-1.83%)
UNITY 23.71 Increased By ▲ 0.06 (0.25%)
WTL 1.33 Decreased By ▼ -0.01 (-0.75%)
BR100 7,434 Decreased By -20.9 (-0.28%)
BR30 24,206 Decreased By -44.4 (-0.18%)
KSE100 71,359 Decreased By -74.1 (-0.1%)
KSE30 23,567 Increased By 0.5 (0%)

LONDON: Oil prices tumbled to their lowest in almost three weeks on Tuesday as supply disruption fears eased and surging Covid-19 cases in China spurred demand concerns.

Brent futures were down $7.89, or 7.3%, at $99.01 a barrel by 1446 GMT while US West Texas Intermediate (WTI) crude was down $7.97, or 7.7%, at $95.04.

Brent fell as low as $97.44 and WTI hit $93.54, their lowest since Feb. 25.

The steep decline followed a statement from Russian Foreign Minister Sergei Lavrov, saying that Moscow is in favour of the 2015 Iran nuclear deal resuming as soon as possible.

Oil falls 8% on Russia-Ukraine talk hopes, China lockdowns

The talks to revive the nuclear accord, which would lead to sanctions on Iran's oil sector being lifted and allow Tehran to resume crude exports, had recently stalled because of Russian demands.

Prices extended losses from the previous day's 5% decline as a Ukrainian negotiator said on Tuesday that talks with Russia over a ceasefire and withdrawal of Russian troops from Ukraine are ongoing.

Meanwhile, Western sanctions against Russia have failed to deter China and India from buying Russian crude.

A steep jump in daily COVID-19 infections in China added further price pressure.

The US Federal Reserve, meanwhile, is widely expected to raise interest rates by 25 basis points on Wednesday for the first time in four years to fight soaring inflation. Such a move could strengthen the US dollar and dampen demand for commodities priced in the currency.

Brent has lost almost $40 since 14-year highs reached on March 7. WTI, meanwhile, has fallen by more than $30.

However, Tuesday's steep price decline surprised several analysts.

"With the fundamental situation hardly changed, and with the tensions and uncertainties around the war in Ukraine still high, it is puzzling to witness the risk premium evaporate so swiftly," said Julius Baer analyst Norbert Rucker.

In addition to the Russia-Ukraine conflict, spare crude production capacity remains limited from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+.

"As the oil market tightness persists through the medium term, we believe the elevated risk premium in oil prices will remain," JPMorgan said on Tuesday.

Comments

Comments are closed.