Oil markets remained nervous early Monday as Asian trading began, with all eyes on reports of possible progress in peace talks between Russia and Ukraine. At the same time, the strengthening US dollar is adding downward pressure to prices, with both major benchmarks losing about 3% last week.
At the time of writing, West Texas Intermediate was trading flat at $58.05, while Brent was still hovering around $62.58.
Last week’s drop saw oil prices settle at their levels since Oct. 21, as markets weighed the possibility that a peace deal could unlock sanctioned Russian supplies.
Traders are interpreting progress in talks, particularly a joint U.S.-Ukraine statement announcing progress on an “updated and refined peace framework” that could require Ukraine to cede territory and move away from its NATO ambitions, as a sign that frozen Russian crude could re-enter global markets.
On the deal itself, U.S. Secretary of State Marco Rubio praised the “tremendous progress” in Geneva and expressed optimism for a deal “very soon,” although the details remain unclear.
Meanwhile, the dollar index approached its highest level since late May, making dollar-priced oil more expensive for many buyers and adding pressure to the market. This adds to a broader bearish sentiment in the markets due to rising OPEC+ production and concerns about demand.
By Charles Kennedy for Oilprice.com
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