Crude oil prices dipped below $110 a barrel on hopes for progress in Russian-Ukraine peace talks even as the conflict rages on.Russian missiles hit a large Ukrainian base near the border with Poland on Sunday.
Still, both Russia and Ukraine gave their most upbeat assessment of prospects for talks, helping investor sentiment on Monday.Just the chance of peace saw oil prices skid, with the benchmark Brent crude last quoted by Reuters down over 2.5 per cent at below $110 early on Monday as some oil-producing countries indicated they might boost supply that Russia's invasion of Ukraine has disrupted.Crude prices have soared since the invasion, which Moscow calls a "special military operation, but with talks of supply boost from other countries, including Iran, they have stabilised somewhat, with higher volatility tracking the news flow.Brent prices were down 4.8 per cent last week after hitting $139.13 on Monday.
In the week before that, prices had surged over 20 per cent.U.S.
crude recorded a weekly drop of 5.7 per cent after touching a high of $130.50 on Monday.
Both contracts last touched these price peaks in 2008.The markets' focus will now shift for cues to oil market reports from the International Energy Administration (IEA) and the Organization of the Petroleum Exporting Countries (OPEC).
Both have previously indicated the market should be oversupplied this year.On Sunday, U.S.
Deputy Secretary of State Wendy Sherman said Russia was showing signs it might be willing to have substantive negotiations over Ukraine, even as Moscow was intent on "destroying" its neighbour.In contrast, Ukrainian negotiator Mykhailo Podolyak said that Russia was "beginning to talk constructively."Russia's invasion, which Moscow calls a "special operation," has roiled energy markets globally."Oil prices might continue moderating this week as investors have been digesting the impact of sanctions on Russia, along with parties showing signs of negotiation towards ceasing fire," Tina Teng, an analyst at CMC Markets, told Reuters."As markets had priced in for a much tighter supply from February to early March, the focus is shifting to the monetary policy in the upcoming FOMC meeting this week, which could strengthen the USD further, and pressuring on commodity prices," Ms Teng added.