By Gina Lee
Investing.com – Oil was down on Wednesday morning in Asia, after retreating more than 3% during the previous session. Investors also considered the decreased probability of a Russian attack on Ukraine alongside a tight market and recovering fuel demand globally.
Brent oil futures edged down 0.17% to $93.12 by 11:58 PM ET (4:58 AM GMT). They moved down 10 cents after sliding 3.3% overnight after Russia announced a partial pullback of its troops near Ukraine, which is yet to be verified by the U.S. WTI futures inched down 0.04% to $92.03 steadying after ending Tuesday's session down 3.6%.
Both Brent and WTI futures hit their highest levels since September 2014 on Monday, when Brent hit $96.78 and WTI climbed to $95.82. Brent futures also jumped 50% in 2021, while WTI futures soared around 60%, as a recovery in global fuel demand continues to put a strain on supplies.
The Russian defense ministry published footage on Tuesday showing that it was withdrawing some troops from the border with Ukraine after exercise. The move triggered profit-taking in oil, while global shares rebounded.
But beyond the Ukraine tension, the oil market remains tight, and prices are still on course for a move towards $100 a barrel, according to some investors.
"Technically we could see prices heading back to $90 a barrel on profit-taking, but they will trend higher towards $100 as the economy is getting back on track and more demand is coming through in a tight market," Probis Group chief investment officer Jonathan Barratt told Reuters.
German Chancellor Olaf Scholz said on Tuesday he saw scope for more diplomacy to avert a war between Russia and Ukraine after he concluded four hours of talks with Russian President Vladimir Putin.
"Talks between German Chancellor Scholz and President Putin supported market expectations that an imminent Russian invasion seems less likely," OANDA senior Market Analyst Edward Moya told Reuters.
Meanwhile, Tuesday’s U.S crude oil supply data from the American Petroleum Institute showed a draw of 1.076 million barrels for the week ended Feb. 11. Forecasts prepared by Investing.com had predicted a 1.769-million-barrel draw, while a draw of 2.025 million barrels was recorded during the previous week.
Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.