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Ceasefire talks between Russia and Ukraine further eased fears
of supply disruptions and surging COVID-19 cases in China
fuelled concerns about slower demand.
Brent futures were down $8.90, or 8.3%, to $98 a barrel at 1125
GMT, while U.S. West Texas Intermediate (WTI) crude was down
$8.97, or 8.7%, to $94.04 a barrel.
Both benchmarks fell below $100 a barrel for the first time
since March 1.
Brent has lost almost $40 since 14-year highs reached on March
7, while WTI has fallen by over $30 since touching highs since
2008 almost a week ago.
The sharp decline in prices follows a statement from Russian
foreign minister Sergi Lavrov on Tuesday that Moscow is in
favour of the 2015 Iran nuclear deal resuming as soon as
possible and is waiting for Washington to lift sanctions on
Tehran.
Talks to revive the nuclear accord, which would lead to
sanctions on Iran's oil sector being lifted, recently stalled
due to Russian demands.
Prices extended their losses from a 5% decline the previous day
after a steep jump in daily COVID-19 infections in China raised
concerns about the increasing economic costs of the country's
tough containment measures.
And talks between Ukrainian and Russian negotiators to ease the
crisis were expected to continue on Tuesday.
In addition, the U.S. Federal Reserve's Federal Open Market
Committee (FOMC) starts a two-day meeting on interest rates on
Tuesday, at which the market expects the first U.S. interest
rate increase for four years.
"The dollar may appreciate if the Fed adopts an aggressive
approach towards higher interest rates despite ongoing
geopolitical risks," said Lukman Otunuga, senior research
analyst at FXTM.
(Additional reporting by Yuka Obayashi in Tokyo; Editing by Mark
Potter)
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