Oil Edges Higher as Ukraine-Russia Peace Talks Trigger Market Volatility

Oil prices climbed above $1 on Wednesday following previous drops, with progressing diplomatic talks between Ukraine and Russia accounting for the latest bout of volatility in the markets.

Brent futures inched up by 1% to $100.88 per barrel at 0503 GMT. The U.S. West Texas Intermediate (WTI) futures also rose by 0.5% to $96.89 a barrel. This comes as both contracts dipped during the initial session with WTI lowering to $94.90 per barrel and Brent dropping to $98.86.

CMC Analyst Tina Teng said, "Traders are awaiting more clues from ceasefire talks after a two-day selloff in the oil markets, but the crude prices may continue being under pressure as high inflation will eventually drag on economic growth and weakens demands." She contended that a stronger dollar stemming from the Fed’s adoption of a more hawkish monetary policy to check record inflation is likely to put additional pressure on oil prices.

Oil hit below the $100 mark on Tuesday for the first time since the end of February, reported Reuters. Until then, it had been reaching multi-year highs after war broke out between Russia and Ukraine on February 24.