• Oil prices have been choppy on Tuesday, with WTI swinging between $105.50 highs and $101.00 lows.
• Geopolitics has been in focus with the EU outlining new restrictions on Russian imports, including on coal.

Oil prices have been choppy on Tuesday, with front-month WTI future erasing earlier session gains that saw prices rise as high as $105.50 to drop as low as $101.00. Prices have now stabilised in the $103.00s. The EU announced new sanctions on Russia, including a ban on all coal imports, in response to alleged widespread war crimes committed by Russian forces against Ukrainian civilians. The EU did not announce new sanctions on Russia’s oil industry, rather indicating that they would come soon, thus removing one potential bullish catalyst for oil prices.

But as the pressure mounts on Western nations to inflict more damage on Russia’s economy, geopolitical risks are set to remain strongly supportive of the oil complex. Add to that the fact that newsflow regarding peace talks has been less optimistic this week than in previous weeks, with recent war crime allegations clearly darkening the mood. The prospect of an imminent peace deal looks slim.

As a result, despite the US’ recent historic oil reserve release announcement, a $100 or high WTI price continues to make good sense. After all, progress in US/Iran talks appears to have once again stalled and OPEC+ leading nations Saudi Arabia and the UAE seem anything but eager to open to taps. If the recent pullback from earlier highs near the 21-Day Moving Average in the $106.00s continues, it wouldn’t be surprising to see dip-buyers emerge around the $100 level.