Oil prices drop due to expectations of peace in Ukraine
13 February 2025 09:58
Oil prices declined on Thursday on expectations of a potential peace deal between Ukraine and Russia. The market believes that such an agreement could end sanctions that have disrupted supply flows. At the same time, the world’s largest oil producer, the United States, has increased its reserves. This was reported by "Komersant Ukrainian" with reference to Reuters.
Futures for Brent crude oil fell 68 cents (0.9%) to $74.50 per barrel as of 07:15 Kyiv time, while US West Texas Intermediate (WTI) fell 65 cents (0.9%) to $70.72.
On Wednesday, Brent and WTI also fell by more than 2% after US President Donald Trump said that Putin and Ukrainian President Volodymyr Zelenskyy expressed a desire for peace in separate phone calls with him. Trump instructed senior US officials to begin negotiations to end the war in Ukraine.
Russia is the world’s third largest oil producer, and sanctions imposed on its oil exports following its invasion of Ukraine almost three years ago have kept prices higher.
Analysts say oil prices fell amid news of potential peace talks due to “optimism about reduced risks to oil supply,” pointing to US and EU sanctions that are reducing Russian production.
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“Signs of tightening supply have been pushing oil prices higher in recent weeks. “Signs of tightening supply have pushed oil prices up in recent weeks,”
– they said.
The market was also affected by an increase in crude oil stocks in the United States, the world’s largest oil producer and consumer. Data from the Energy Information Administration (EIA) on Wednesday showed that oil inventories rose more than expected last week.
Thus, crude oil inventories increased by 4.1 million barrels to 427.9 million barrels for the week ended February 7, the EIA reported. This exceeded analysts’ expectations in a survey for a 3 million barrel increase.
“This recent decline in crude oil futures follows a period of consistent inventory builds. Geopolitical developments, such as proposals to end the conflict in Ukraine, could put additional pressure on oil prices,”
– said Darren Lim, commodity strategist at Phillip Nova.
Trump’s threats of additional tariffs against US trading partners have also weighed on prices on fears that this could reduce economic growth and thus oil demand.
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