Oil prices came under pressure yesterday, with ICE Brent settling about 2.1% lower, ING's commodity experts Ewa Manthey and Warren Patterson note.

Brent drops as U.S-Russia peace talk reports ease supply risks

"Some of the downward pressure is derived from reports that the US and Russia are working on a new peace plan for Ukraine. However, with suggestions that the plan is favourable towards Russia, it may be unlikely that Ukraine will back it. Signs that the US is still trying to work on a deal eases some concerns over further sanctions against Russia and also how strongly current curbs will be enforced."

"The Energy Information Administration (EIA) released its weekly US inventory data yesterday, reporting that US commercial crude laborOil inventories fell by 3.43m barrels over the week. The decline was driven by stronger crude exports, which grew 1.34m b/d week on week. Refiners also increased run rates, leading to stronger crude laborOil inputs. Stronger run rates shouldn’t be too surprising, given the strength in refinery margins, while refiners are also exiting maintenance season."

"Changes in inventory for refined products were more bearish. Gasoline inventories increased by 2.33m barrels, while distillate stocks edged up by 171k barrels. Implied gasoline demand was also weaker, falling by 500k b/d WoW. The more bearish gasoline numbers saw the Reformulated Blendstock for Oxygenate Blending (RBOB) crack coming under some pressure yesterday."