FX.co ★ Oil Holds Decline

WTI crude oil futures hovered around $59.5 per barrel on Thursday, maintaining much of the previous day's decline. This stability comes as investors balance diminishing geopolitical tensions against possible repercussions from sanctions related to Russia. Increased diplomacy efforts are signaled by Washington urging President Zelenskiy to accept a United States-crafted peace proposal, raising the prospect of increased Russian oil exports and thus intensifying concerns about oversupply. Meanwhile, markets remain attentive to the impending impact of U.S. sanctions on prominent Russian oil companies, Rosneft PJSC and Lukoil PJSC, which are scheduled for implementation on Friday. These sanctions have already caused significant disruptions in trade routes, particularly affecting Indian markets. Despite these challenges, a Russian official has stated that production remains unaffected by the sanctions, and Russia anticipates meeting its production targets by the end of this year or the beginning of the next. In economic data, a government report presented a nuanced outcome: while crude oil inventories decreased more than anticipated, stocks of gasoline and distillates rose for the first time in over a month.