Market Close: March 17 Up, Diesel Up $.38 cents

West Texas Intermediate crude for April delivery climbed $7.94, or nearly 8.4%, to settle at $102.98 a barrel. The contract fell nearly 1.5%, to settle at $95.04 a barrel on the New York Mercantile Exchange on Wednesday, the lowest front-month contract settlement since Feb. 25, according to Dow Jones Market Data. May Brent crude, the global benchmark, jumped $8.62, or 8.8%, to $106.64 a barrel. Brent fell 1.9% to $98.02 a barrel on ICE Futures Europe on Wednesday. April gasoline rose 7.7% to $3.217 a gallon, while April heating oil jumped 12.5% to $3.487 a gallon. The rebound for oil comes after both WTI and Brent on Tuesday closed 22% below nearly 14-year highs set on March 8, meeting the technical definition of a bear market.

Commodity markets have been volatile following Russia’s Feb. 24 invasion of Ukraine. Hopes for a negotiated peace were pushed back on Thursday, amid reports that Russia denied significant progress had been made in talks with Ukraine officials. A sharp pullback in crude prices from March 8, when WTI and Brent settled at their highest levels since 2008, “suggests that much of the geopolitical risk premium has evaporated despite the remaining conflict,” said Thomas Westwater, analyst at DailyFX in emailed commentary. “China’s recent lockdown of its coastal cities, including the manufacturing hub Shenzhen, has also helped to tamp down on prices,” he said, with reduced oil demand from those lockdowns helping to ease prices. “The potential for further lockdowns in China may also be a factor helping to temper near-term demand expectations.”

Early Thursday, however, Russia carried out further airstrikes on the besieged port city of Mariupol and oil prices moved up, with Brent crude back above the psychological $100 a barrel mark as “risk-on sentiment drives optimism towards the global demand outlook,” said Victoria Scholar, head of investment at Interactive Investor, in a note to clients. Scholar added that a “stark assessment” from the International energy Agency on Wednesday that the market could lose 3 million barrels of Russian oil a day from April have prompted supply worries, driving prices upwards.

Still, “if the Ukraine war continues to show tentative signs of easing, the dizzy heights of almost $140 for oil, driven by last week’s geopolitical risk premium, are unlikely to be repeated in the immediate term,” said Scholar.

On Wednesday, the EIA that U.S. crude inventories rose by 4.3 million barrels for the week ended March 11. The government agency also reported a weekly inventory decline of 3.6 million barrels for gasoline, while distillate stockpiles edged up by 300,000 barrels. The EIA data also showed crude stocks at the Cushing, Okla., Nymex delivery hub edged up by 1.8 million barrels last week. But stockpiles at Cushing are “still at critically low levels,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Stocks in the U.S. Strategic Petroleum Reserve also fell to “just 33 days or current implied demand, raising supply risks if the Russia-Ukraine war were to intensify.”