Oil bounced all over the place in another volatile session as traders reacted to the peace talks and a closely-watched report that cut its forecast of world demand.
Ukraine's president said the positions of Ukraine and Russia were sounding more realistic, but time was needed.
Russia's foreign minister said some deals with Ukraine were close to being agreed.
"Fears of a supply disruption have been tempered by tentative signs of progress in ceasefire talks between Russia and Ukraine," said Stephen Brennock of oil broker PVM.
"That said, an end to hostilities still seems like a long way off," he added.
Benchmark Brent crude had swung between $97.55 and $103.70 and was at $99.54 per barrel, down 0.37% in afternoon trading.
US West Texas Intermediate crude rose 0.15% to $96.58.
The price falls also followed the release of the International Energy Agency's monthly report that cut its oil demand forecast for 2022.
A day earlier, the Organization of the Petroleum Exporting Countries held its forecast steady.
Crude settled below $100 yesterday, the first time since late February. Trading has been volatile since Russia's invasion of Ukraine on February 24, with prices hitting a 14-year high on March 7, but Brent has since fallen nearly $40 a barrel.
Oil had also come under pressure this week from concerns of slowing demand in China as it takes measures against the Omicron coronavirus variant. Those fears appeared to ease today, as figures showed fewer new cases.
Besides the Fed decision, in focus today will be the latest round of US inventory data due later this evening from the Energy Information Administration. Analysts expect a 1.4 million barrel drop in crude stocks.
