Oil Falls as Trump Begins Russia-Ukraine Peace Talks
Oil prices fell below $75 per barrel in the global commodity market as U.S President Donald Trump initiates peace talk with Russian President Vladimir Putin.
Trump and Putin team will be holding meet to facilitate potential peace talks between Russia and Ukraine. Trump said on his social medai handle that he and Putin have agreed to have their respective teams starting negotiations immediately.
“…and we will begin by calling President Zelenskiy, of Ukraine, to inform him of the conversation, something which I will be doing right now”, Trump said. Brent crude fell by 0.8%, trading at $74.24 per barrel while the US benchmark West Texas Intermediate (WTI) decreased by 0.9%, settling at $70.47 per barrel, compared to its prior session close of $71.16.
US commercial crude oil inventories rose by about 4.1 million barrels last week to 427.9 million barrels, according to the US Energy Information Administration, higher than the market prediction of 2.8 million barrels increase.
The larger-than-expected increase in inventory signaled a decline in demand in the US, the world’s largest oil consumer, pushing oil prices lower. Additionally, concerns that Trump’s policies could disrupt the Fed’s disinflation efforts continue to weigh on oil prices.
Also, the rise in the Consumer Price Index (CPI) in the US indicated that interest rates would stay high for longer, raising concerns about a potential economic slowdown.
The country’s CPI rose 0.5% on a monthly basis and 3% on an annual basis in January, beating expectations. The CPI recorded its fastest monthly increase since August 2023, while annual inflation reached its highest level since July 2024.
Data indicating accelerating price increases in the US also reinforces forecasts that the Fed will continue its cautious approach to interest rate cuts. Meanwhile, improving prospects for a peace settlement in the Russia-Ukraine war eased market player’s supply concerns.
Ukrainian President Volodymyr Zelenskyy announced on Wednesday that he discussed the possibilities of achieving peace with Trump during a phone call.
Trump revealed that he also spoke to his Russian counterpart Vladimir Putin, who supported his view that the time has come for them to ‘work together.’ The possibility of a peace deal that could potentially lift restrictions on Russian oil supply due to US sanctions supported the decline in prices.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) reported Wednesday that oil production fell in January, capping further price declines.
According to OPEC’s monthly oil market report, the group’s crude oil production fell by 121,000 barrels per day last month to 26.6 million barrels. #Oil Falls as Trump Begins Russia-Ukraine Peace Talks CBN Opens FX Window for BDC to Stock up at NFEM Rate
