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LONDON: Oil fell below $100 a barrel in a volatile session on Wednesday, as it came under pressure from signs of progress in Russia-Ukraine peace talks and a closely-watched report that cut its forecast of world demand.
Ukraine’s president said the positions of Ukraine and Russia were sounding more realistic but time was needed. Russian foreign minister said some deals with Ukraine were close to being agreed.
Brent crude fell 54 cents or 0.5% to $99.37 a barrel, having traded as high as $103.70 earlier. US West Texas Intermediate (WTI) crude slipped 96 cents or 1% to $95.48.
The price falls also followed the release of the International Energy Agency’s monthly report that cut its oil demand forecast for 2022. . A day earlier, the Organization of the Petroleum Exporting Countries held its forecast steady.
Crude settled below $100 on Tuesday, the first time since late February. Trading has been volatile since Russia’s invasion of Ukraine on February 24, with prices hitting a 14-year high on March 7, but Brent has since fallen nearly $40 a barrel.
The US Federal Reserve is expected to raise rates for the first time in three years and give guidance on future tightening. Investors are expecting the central bank to raise rates by at least 25 basis points.
Oil had also come under pressure this week from concerns of slowing demand in China as it takes measures against the Omicron coronavirus variant. Those fears appeared to ease as figures showed fewer new cases.
Besides the Fed decision, the latest round of US inventory data due from the Energy Information Administration. Analysts expect a 1.4 million barrel drop in crude stocks.