Crude oil prices moved lower on Thursday on the prospect of a peace deal for Ukraine, following a statement by President Donald Trump who said the presidents of both Russia and Ukraine had separately expressed a willingness to reach a peace deal.
At the time of writing, Brent crude was trading at $74.55 a barrel, with West Texas Intermediate at $70.79 a barrel, after booking another daily drop Wednesday after the Energy Information Administration reported a weekly inventory build of 4.1 million barrels for the week to February 7.
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Meanwhile, President Trump said, after talking with Russia’s Vladimir Putin for over an hour that “He wants it to end. He doesn’t want to end it and then go back to fighting six months later.” The U.S. president added “I think we’re on the way to getting peace. I think President Putin wants peace, President Zelenskiy wants peace and I want peace. I just want to see people stop getting killed,” as quoted by Reuters.
U.S. Defense Secretary Pete Hegseth said on Wednesday that Ukraine should not be hoping for a return to its pre-2014 borders, which was “unrealistic” and added that NATO membership is also out of the question.
“We want, like you, a sovereign and prosperous Ukraine. But we must start by recognizing that returning to Ukraine’s pre-2014 borders is an unrealistic objective,” Hegseth said, adding “Chasing this illusionary goal will only prolong the war and cause more suffering.”
A peace deal could lead to the lifting of U.S. sanctions on Russia’s energy industry, which would potentially boost the international supply of Russian crude, dampening prices. However, global supplies have tightened, with energy market analyst John Kemp reporting that OECD inventories have fallen to the lowest since 2022. This has put a floor on oil prices, Kemp wrote in a recent report. The prospect of a peace deal for Ukraine could move that floor lower.
By Irina Slav for Oilprice.com
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