Oil prices yesterday declined over fresh news that the President of Ukraine, Volodymyr Zelenskyy has agreed to work with the United States, led by President Donald Trump on a peace plan.
The agreement is viewed as a development that could ultimately add fresh barrels into an already fragile market. According to oilprice.com, West Texas Intermediate for December delivery fell by 2.51% to $57.52 per barrel while Brent crude, declined by 2.19% to $61.99.
The report stated that a continued pullback would mark the third consecutive daily decline for WTI, putting the U.S. benchmark on track for a weekly loss of over 4%, a reflection of broader concerns over global supply growth and a weakening demand outlook “News of Zelenskyy considering the peace proposal comes on the same day that new U.S. sanctions on Rosneft and Lukoil officially take effect, targeting key subsidiaries in an effort to restrict Kremlin revenue from fossil-fuel sales.
While those sanctions should tighten supply, that has largely been baked into markets at this point. “Russian Urals crude, already discounted due to sanctions, has been trading as much as $23 per barrel below other global grades, evidence that sanctions are having an effect.
“In the U.S, crude stockpiles unexpectedly fell by 3.4 million barrels last week on the back of strong refinery activity. But the bullish inventory surprise failed to lift prices as traders remained focused on the geopolitical picture,” it said.
It added: “Energy markets also faced macro-driven pressure, with Asian stocks declining sharply after Thursday’s U.S. employment data clouded expectations for imminent Federal Reserve rate cuts, boosting the dollar and intensifying risk-off sentiment.
