Oil costs fell beneath $60 a barrel on Tuesday, the bottom since Could, as prospects for a Russia-Ukraine peace deal appeared to strengthen, elevating expectations sanctions might be eased.
Brent crude futures fell $1.03, or round 1.7%, to $59.53 a barrel at 1340 GMT, whereas U.S. West Texas Intermediate crude was buying and selling at $55.76, down $1.06, or 1.9%.
“Brent has dropped this morning to beneath $60 per barrel for the primary time in months, because the market assesses a possible peace deal leading to extra Russian volumes changing into out there and oversupplying the market additional,” mentioned Rystad analyst Janiv Shah.
The U.S. supplied to offer NATO-style safety ensures for Kyiv and European negotiators reported progress in talks on Monday, sparking optimism that an finish to the battle was nearer.
Russia, in the meantime, mentioned it was not prepared to make any territorial concessions, state information company TASS quoted Deputy Overseas Minister Sergei Ryabkov as saying.
“The grind in talks can be matched with the continued grind decrease in costs as we enter 2026 with all its related predictions of ‘glut.’ Brent will make a recent year-to-date low, however won’t break beneath $55 a barrel earlier than the 12 months is out,” mentioned PVM Oil Associates analyst John Evans.
The six-month Brent futures unfold moved right into a contango for the primary time since October.
Barclays analysts anticipate Brent to common $65/bbl in 2026, barely forward of the ahead curve, as a result of anticipated 1.9 million bpd surplus they see as being priced in already.
Including to the strain, smooth Chinese language financial knowledge on Monday additional fuelled considerations that international demand will not be robust sufficient to soak up current provide progress, mentioned IG market analyst Tony Sycamore.
China’s manufacturing facility output progress slowed to a 15-month low, official knowledge confirmed. Retail gross sales additionally grew at their slowest tempo since December 2022, in the course of the COVID-19 pandemic.
Fears of an oversupply have been marginally offset by the U.S. seizing an oil tanker off Venezuela final week, however merchants and analysts mentioned a glut of floating storage and a surge in Chinese language shopping for from Venezuela in anticipation of sanctions have been additionally limiting the market affect.
(Reuters)
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