【Ferro-alloys.com】Crude oil futures edged higher mid-morning in Asia March 30, in a tentative sign that the heavy sell off over the last two days has abated amid progress in the Russia-Ukraine talks and still rising Shanghai COVID-19 cases.

At 10:50 am Singapore time (0200 GMT), the ICE May Brent futures contract was up 83 cents/b (0.75%) from the previous close at $111.06/b, while the NYMEX May light sweet crude contract rose 95 cents/b (0.91%) at $105.19/b.

Russian and Ukrainian negotiators appear to have moved closer to a ceasefire agreement as the two sides met in Istanbul March 28 for the first face-to-face talks in more than two weeks. Russia has promised to scale back military operations near Kyiv, while Ukraine proposed adopting a neutral stance with security guarantees, according to media reports.

The reports sent ICE Brent crude crashing by almost $8/b, though it later recouped most of its losses to settle $2.25/b lower on the day.

"There is some scepticism around Russia's announcement which is why we saw the market recoup some of the initial losses later in the trading session," ING analysts Warren Patterson and Wenyu Yao said in a March 30 note.

"Given the level of uncertainty in the market at the moment combined with the tight supply/demand balance, we expect that oil prices will remain extremely volatile," they added.

Nonetheless, front month ICE Brent crude contract has lost more than $10/b over the last two days alone, as sentiment was hit by lockdowns in Shanghai over surging COVID-19 cases and progress in Russia-Ukraine talks.

COVID-19 cases in Shanghai, currently the epicenter of the outbreak in China, continue to climb. The city reported 5,656 asymptomatic COVID-19 cases and 326 symptomatic cases for March 29, a fresh record high. This was up from 4,381 asymptomatic cases and 96 symptomatic cases the previous day.

Analysts, however, point to signs that the current lockdown will not have as bad an effect on the economy as feared.

"The term "lockdown" unfortunately conjures memories of 2020 -- this is nothing like 2020," SPI Asset Management Managing Partner Stephen Innes said in a note.

"Similar measures elsewhere in China have allowed businesses to continue operating within bubbles. Other Chinese risk markets remain relatively unperturbed by Shanghai's COVID-related lockdown. This could reflect an expectation that business closures will remain short-lived," he added.

Focus will return to oil market fundamentals, with supply still reportedly falling far short of demand as many buyers remain averse to taking Russian oil, and Iranian nuclear talks remained in a deadlock.

The OPEC+ group's meeting on March 31 will also be on watch.

Dubai crude swaps and intermonth spreads were lower in mid-morning trade in Asia March 30 from the previous close.

The May Dubai swap was pegged at $100.76/b at 10 am Singapore time (0200 GMT), down 99 cents/b (0.97%) from the March 29 Asian market close.

The April-May Dubai swap intermonth spread was pegged at $4.31/b at 10 am, down 35 cents/b over the same period, and the May-June intermonth spread was pegged at $2.62/b, down 27 cents/b.

The May Brent-Dubai EFS was pegged at $10.26/b, down $1.29/b.

• [Editor:zhaozihao]