Oil Prices Decline as Russia-Ukraine Peace Talks Progress
Crude oil futures fell on Monday, with Brent crude futures down 14 cents, or 0.22%, to $62.42 per barrel at 0148 GMT, and West Texas Intermediate down 15 cents, or 0.26%, at $57.91 a barrel. Both benchmarks experienced a roughly 3% decline last week, reaching their lowest settlements since October 21, amid concerns that a potential russia-Ukraine peace agreement could lead to the lifting of sanctions on Moscow and an increase in oil supply.
The price drop was largely attributed to a push for a peace deal led by U.S. President Donald Trump, according to IG analyst Tony Sycamore, who noted markets view this as a “fast track to unlocking considerable russian supply.” Sycamore added that progress toward a peace deal outweighed the impact of recent U.S. sanctions on Rosneft and Lukoil, which have left approximately 48 million barrels of Russian crude stranded at sea.
talks between the U.S. and Ukraine on Sunday reportedly yielded progress on a peace plan that could involve Ukraine ceding territory and foregoing plans to join NATO. Trump has set a deadline for a deal of this Thursday, though european leaders are advocating for more favorable terms. A finalized agreement could result in the rollback of sanctions impacting Russian oil exports.
In 2024, Russia was the world’s second-largest crude oil producer, following the U.S.,as per the U.S. Energy Information Governance.
Adding to downward pressure on oil prices, uncertainty surrounding potential U.S. interest rate cuts also dampened investor enthusiasm. However, the possibility of a rate cut in the near term increased after New York Federal Reserve President John Williams indicated a cut “in the near term.”
The U.S. dollar, headed for its largest weekly increase in six weeks and reaching its highest level since late May, further contributed to the decline in oil prices, as a stronger dollar makes oil more expensive for buyers using other currencies.