Oil Prices Retreat on Trump-Putin Ukraine Talks
Oil prices have plunged to their lowest level in over two months following the announcement of talks between US President Donald Trump and Russian President Vladimir Putin to resolve the Ukraine conflict. This surge of optimism has fueled speculation that supply risks from Russia may diminish.
West Texas Intermediate (WTI) oil futures settled near $71 per barrel, marking a 2.7% decline from Wednesday, the largest drop since late November. Brent crude futures closed around $75.
According to a social media post by Trump, negotiations will commence immediately, with a potential meeting between the two leaders in Saudi Arabia in the near future. US sanctions targeting Moscow's oil sector have disrupted crude flows from Russia, contributing to gains in global oil benchmarks earlier this year.
However, market sentiment has been influenced by Trump's ongoing trade conflicts, leading to a decline in prices over the past three weeks. The Organization of the Petroleum Exporting Countries (OPEC) has warned that the president's trade policies could exacerbate volatility in global markets and potentially create supply-demand imbalances unrelated to underlying fundamentals.
OPEC's monthly report also highlighted improved adherence to production cuts among its members. The International Energy Agency is expected to provide further insights into market conditions, including supply and demand forecasts, later on Thursday.