Oil prices continued to slide on Wednesday after falling into a bear market just a week after hitting their highest levels since 2008.
West Texas Intermediate (WTI) futures fell more than 1% in early trading to $95.43, while Brent futures – the global benchmark – fell 1% to $99 a barrel.
Prices initially rose on Wednesday after two days of steep declines. But renewed hope for a peace agreement between Russia and Ukraine has erased those gains and ensured the continued fall.
Ukrainian President Volodymyr Zelensky said peace talks were starting to look “more realistic” in a video address to the nation, according to multiple reports. Russian Foreign Minister Sergei Lavrov told RBC News that there was “some hope to reach a compromise”, Reuters reported.
Oil prices have fallen in recent days, in part on hopes of ceasefire talks between Russia and Ukraine and new lockdown restrictions imposed by China, which could weaken demand.
WTI fell more than 6% on Tuesday, settling at $96.44 a barrel, 22% from its March 8 high of $123.70. Brent also fell more than 6% to $99.91, 22% below its March 8 high of $127.98. Both officially entered a bear market on Tuesday, after falling more than 20% from recent highs.
Brent’s five-day drop is its fastest drop from a recent high into bear market territory since 1996, while it’s WTI’s fastest drop into a bear market since April 2020, so that it only took a day, according to Dow Jones Market Data.
“With new, albeit timid, hope for constructive talks between Ukraine and Russia, there is room for another heat wave. [of] the price of oil,” said Sophie Lund-Yates, analyst at Hargreaves Lansdown. “However, continued volatility is more likely to occur,” she added.
Write to Callum Keown at [email protected]