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Brent was down by $4.67, or 4.1%, at $108.00 a barrel at 1000
GMT, and U.S. West Texas Intermediate (WTI) crude fell $5.71, or
5.2%, to $103.62 a barrel.
Both contracts have surged since Russia's Feb. 24 invasion of
Ukraine and are up roughly 40% for the year to date.
Ukrainian and Russian negotiators are set to talk again on
Monday via video link. Negotiators had given their most upbeat
assessments after weekend negotiations, suggesting there could
be positive results within days.
"Beside new talks between Ukraine and Russia, I guess new
lockdowns in China are the reason for a negative start of the
week for crude oil," said UBS analyst Giovanni Staunovo.
China, the world's largest crude oil importer and second largest
consumer after the United States, is seeing a surge in COVID-19
cases, as the highly transmissible Omicron variant spreads to
more cities, triggering outbreaks from Shanghai to Shenzhen.
Its daily new case load figures have hit two-year highs, with
1,437 new confirmed coronavirus cases reported on March 13.
"This week, market participants are closely tracking how Russian
oil exports are evolving. So far this month oil flows had not
been disrupted," Staunovo added.
Russia's output of oil and gas condensate rose to 11.12 million
barrels per day (bpd) so far in March, two sources familiar with
oil production data told Reuters, despite the sanctions on
Russian oil.
The United States has announced a ban on Russian oil imports and
Britain said it would phase them out by the end of the year.
Russia is the world's top exporter of crude and oil products
combined, shipping around 7 million barrels per day or 7% of
global supplies.
British Prime Minister Boris Johnson is trying to persuade Saudi
Arabia to increase its oil output, a senior minister said,
following reports that Johnson would travel to the OPEC
heavyweight this week.
"Oil prices might continue moderating this week as investors
have been digesting the impact of sanctions on Russia, along
with parties showing signs of negotiation towards (a)
ceasefire," said Tina Teng, an analyst at CMC Markets.
Investors are also closely watching the U.S. Federal Reserve
meeting this week. The Fed is expected to start raising interest
rates, which would boost the dollar and put downward pressure on
oil prices.
Oil prices typically move inversely to the U.S. dollar, with a
stronger greenback making commodities more expensive for holders
of foreign currencies.
(Reporting by Bozorgmehr Sharafedin in London, additional
reporting by Emily Chow in Beijing, Stephanie Kelly in New York;
Editing by Edwina Gibbs, Jacqueline Wong and Susan Fenton)
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