FX.co ★ Oil Falls to 5-Week Low on Ukraine Peace Deal

On Tuesday, West Texas Intermediate (WTI) crude oil futures decreased by over 2.5%, reaching $57.2 a barrel, marking the lowest point in five weeks. This decline was influenced by reports indicating that Ukraine had agreed to the terms of a revised peace deal to end the ongoing war with Russia. Ukrainian President Zelenskiy mentioned that discussions with the United States continue, although Russia's position remains ambiguous. Intense diplomatic efforts are evident in negotiations taking place in Geneva and concurrent US-Russia discussions in Abu Dhabi, despite ongoing airstrikes signaling persistent unrest. The potential resolution of the conflict could profoundly impact oil markets, as Russia, a significant oil producer, is under substantial Western sanctions, and recent Ukrainian drone attacks on refineries have hindered refined fuel supplies. An increase in Russian oil output might contribute to an already oversupplied market, as global producers are ramping up production at a pace outstripping demand. Oil prices have experienced declines throughout this year and are expected to record a fourth consecutive monthly decrease.