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 US$8.90, or 8.3%, to US$98 a barrel at 11.25am GMT, while US West Texas Intermediate (WTI) crude was down US$8.97, or 8.7%, to US$94.04 a barrel.

Both benchmarks fell below US$100 a barrel for the first time since March 1.

Brent has lost almost US$40 since 14-year highs reached on March 7, while WTI has fallen by over US$30 since touching highs since 2008 almost a week ago.

The sharp decline in prices follows a statement from Russian Foreign Minister Sergey Lavrov 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 today.

In addition, the US Federal Reserve’s Federal Open Market Committee (FOMC) starts a two-day meeting on interest rates today, at which the market expects the first US 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.