Oil Falls Again Is Ukraine Peace a Trigger?
Oil prices fell on Tuesday, continuing their decline from the previous session. The market is starting to see a stronger chance of a Russia-Ukraine peace deal, leading traders to speculate that sanctions against Russia could be eased and supply increased.
In the latest moves, Brent fell 0.6% to $60.21 per barrel, while WTI fell 0.5% to $56.52 per barrel. So, while the declines aren't significant, they remain pressured as market sentiment is leaning toward "supply loosening."
ANZ analysts believe prices are falling as the market weighs optimism about a Russia-Ukraine peace deal. The concern is that if the situation improves, US sanctions on Russian oil companies could eventually be lifted, which would increase supply in an already overcrowded market.
On the political front, the US is said to be offering NATO-style security guarantees to Kyiv, and European negotiators reported progress in talks on Monday. However, there are still outstanding points, namely territorial concessions, so a final agreement remains unclear.
Pressure is mounting as Chinese economic data also weakens. The latest data shows factory output growth slowing to a 15-month low, and retail sales growing at their slowest pace since late 2022. This has raised market concerns that global demand—especially from China, the largest oil buyer—is insufficient to absorb the rising supply.
Another factor holding down prices is the state of inventories: traders cited abundant oil in floating storage and a surge in Chinese purchases from Venezuela in anticipation of sanctions, minimizing the impact of the US seizure of a Venezuelan tanker last week. Essentially, the market is focused on two things: the potential for increased supply and weakening Chinese demand. (Asd)
Source: Newsmaker.id
