Title: Oil Up, Reverses Losses as Supplies Remain Tight

Mar 30, 2022 01:26AM ET

By: AnalysisWatch

Oil prices rose in Asia on Wednesday morning, reversing losses from the previous session, as hopes grew for progress in peace talks between Russia and Ukraine. The latest crude supply data in the US was also a clear indication of tight supply in the market.

Brent oil futures rose 0.53% to $108.28 at 1:20 PM ET, reversing a 2% loss from the previous day. WTI futures rose 0.67% to $104.94, reversing Tuesday's 1.6% decline.

Investors focused on tightening supply. Crude oil supply data in the US released on Tuesday by the American Petroleum Institute showed a decline of 3 million for the week ending March 25th. Investing.com forecasts predicted a decline of 1.558 million barrels, compared with a decline of 4.28 million barrels the previous week.

Investors are awaiting crude supply data from the U.S. Energy Information Administration, which will be released later in the day.

In the previous session, the market fell about 2% after Russia pledged to reduce military operations around Kyiv and other cities during face-to-face peace talks on Tuesday. The move comes more than a month after Russia invaded Ukraine on February 24, but reports of attacks continue.

Ukrainian President Volodymyr Zelensky also said the talks were promising, but he was still waiting for concrete results. Speaking late in the evening, he said, "We can say that the signals we are getting from the talks are positive, but they don't drown out the explosions of Russian shells."

Investors are also eagerly awaiting the next meeting of the Organisation of Petroleum Exporting Countries and its allies (OPEC+), scheduled for Thursday. Major oil producers are unlikely to increase production beyond the agreed 400,000 barrels a day, several sources close to the cartel told Reuters, adding to an already tight market.