Petroleum prices gained more than 2% on Wednesday after Moscow said that peace talks with Ukraine had hit a dead end, stoking supply worries, while weak economic data from China and Japan kept a lid on gains.
Brent crude rose by $2.26, or 2.2%, to $106.90 U.S. a barrel while U.S. West Texas Intermediate (WTI) crude futures gained $2.02, or 2%, to $102.62. Both benchmarks had surged by more than 6% on Tuesday.
Russian President Vladimir Putin on Tuesday blamed Ukraine for derailing peace talks and said Moscow would not let up on what it calls a “special operation” to disarm its neighbour.
Crude futures are also drawing support from Russian oil and gas condensate production falling to below 10 million barrels per day (bpd) on Monday, its lowest since July 2020.
The International Energy Agency (IEA) on Tuesday said it expected Russian oil output losses to average 1.5 million bpd in April, with losses growing to close to 3 million bpd from May.
Western sanctions against Russia and logistical constraints have hampered trade, people familiar with the data said on Tuesday.
The Organization of the Petroleum Exporting Countries has warned that it would be impossible to replace potential supply losses from Russia and hinted that it would not pump more crude.
Reports this week of partial easing of some of China’s tight COVID-19 lockdown measures also underpinned oil prices.