Crude Oil Rate: Oil prices continue to tumble on Russia-Ukraine diplomacy efforts, surge in COVID-19 cases in China

Oil prices extended their tumble on Tuesday, falling more than 5 per cent for the second day in a row based on international efforts to mediate over the Russia-Ukraine conflict and on renewed COVID-19 measures implemented by China after an unexpected surge in Omicron cases.

Oil was also pressured by concerns expressed by oil exporter group OPEC about near-term supply-demand.

Global crude benchmark Brent was down by USD 5.84, or 5.5 per cent, at USD 101.06 a barrel by noon. Earlier, it fell to USD 97.50, the lowest price since February 25. Brent surged to a high of USD 139.12 on March 7, after Russia launched its special military operation in Ukraine.

US crude's West Texas Intermediate (WTI), benchmark was down by USD 6.01, or 5.8 per cent, at USD 97 a barrel. It earlier fell to USD 93.56, its lowest since February 25. WTI surged to 2008 highs of USD 130.50 on March 7.

Oil prices have lost more than 10 per cent since this week began. The drop is even more precipitous - at around 30 per cent - when compared to the 14-year highs of above USD 130 a barrel attained by both WTI and Brent just over a week ago.

Diplomatic activity quickened on multiple fronts on Monday as the conflict in Ukraine entered its 20th day, media reports said, adding that the leaders from Poland, the Czech Republic and Slovenia were travelling to Kyiv on Tuesday.

China, meanwhile, reported an increase in daily COVID-19 infections on Tuesday, with new cases more than doubling from a day earlier to hit a two-year high, raising concerns about the rising economic costs of its tough measures to contain the disease, media reports said.

On the OPEC front, the 13-member Organization of Petroleum Exporting Countries, which leads the wider 23-member OPEC+ alliance, said its 2022 forecasts for demand growth, supply growth and global economy were "under assessment" due to shifting market conditions. The 13-member cartel said its output rose by 440,000 barrels daily in February, exceeding its pledged increase under the OPEC+ deal.

Adding to oil's weight was the likelihood of reaching an imminent nuclear deal for Iran.

A US official said on Monday that negotiators were "close to the finish line" on a deal that could end nearly four years of sanctions on Iran's oil and pave the way for the return of hundreds of thousands of barrels daily to a market starved of supply.

(ANI/Sputnik)