The sharp drop in oil prices leaves them at very high levels

The oil market reacted logically to the announcement of a partial withdrawal of Russian troops massed on the border with Ukraine: prices showed their biggest daily drop since the beginning of the year, with Brent 1st-nearby losing more than $3/b. One might think that there is still some downside potential if indeed the easing is confirmed, but one can also only note that the price of a barrel of Brent remains above $93 and is already rising again this morning. In a way, the limited drop in the geopolitical premium only highlights the difficulty that supply has in adjusting to short-term oil demand.

Regarding the negotiations with Iran, it seems that they are stumbling over the fact that Iran would like a commitment from the US not to renege on their commitments (especially in the perspective of a return of Trump to power), which obviously cannot be promised by the Biden administration. A positive outcome to the Iranian nuclear negotiations could therefore be delayed. 

In the US, the API expects a further decline in crude and product stocks. Inventories at Cushing are expected to fall by 2.4mb/d, putting them at their lowest level in four years.