By Alex Lawler
LONDON, March 16 (Reuters) – Oil rose almost 3% on Wednesday, returning to above $100 a barrel and recovering from earlier decline, as concerns about slowing demand in China eased, although signs of progress in the peace talks between Russia and Ukraine limited progress.
* The Ukrainian president said that the positions of Ukraine and Russia seemed more realistic but more time was needed. The Russian Foreign Minister, meanwhile, noted that some agreements with Ukraine were close to being finalized.
* “Fears of a supply disruption have been tempered by signs of progress in talks between Russia and Ukraine,” said Stephen Brennock of oil broker PVM. “That said, the end of hostilities still seems a long way off.”
* Brent crude was up $2.55, or 2.6%, at $102.46 a barrel by 0923 GMT. US West Texas Intermediate (WTI) crude added $1.34, or 1.4%, to $97.78 a barrel.
* Oil trimmed gains after the International Energy Agency cut its 2022 oil demand forecast. A day earlier, the Organization of the Petroleum Exporting Countries maintained its forecast.
* Crude oil fell below $100 on Tuesday for the first time since late February. Trading has been volatile since the Russian invasion of Ukraine on February 24, with prices hitting a 14-year high on March 7, though Brent has fallen nearly $40 a barrel since then.
* The US Federal Reserve is expected to raise interest rates for the first time in three years on Wednesday and give guidance on future adjustments. Investors expect the central bank to raise rates by at least 25 basis points.
* Oil has also come under pressure this week on concerns about slowing demand in China, which is cracking down on the coronavirus VARIOUS omicron. New cases of domestic transmission were almost halved on March 15 compared to the day before, the national health commission said.
* In addition to the Fed’s decision, attention will turn Wednesday to the latest round of US inventory data to be released by the Energy Information Administration. Analysts expect a 1.4 million barrel drop in crude stocks.
(Additional reporting by Emily Chow; Editing in Spanish by Javier Leira)