Oil markets remained on edge early on Monday in early Asian trade, with all eyes on reports of potential progress in the Russia-Ukraine peace talks. At the same time, a strengthening U.S. dollar is adding downward pressure to prices, with both major benchmarks having lost roughly 3% last week.
At the time of writing, West Texas Intermediate was trading flat at $58.05 while Brent continued to hover around $62.58.
Last week’s decline saw oil prices settle at their lowest levels since October 21, as markets weighed the possibility that a peace deal could unlock sanctioned Russian supply.
Traders are interpreting the advance in talks, notably a joint U.S.–Ukraine statement announcing progress in an “updated and refined peace framework” that could require Ukraine to yield territory and step back from its NATO ambitions, as a signal that frozen Russian crude might re-enter global markets.
On the deal itself, U.S. Secretary of State Marco Rubio hailed “tremendous progress” in Geneva, expressing optimism for a deal “very soon,” though 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 markets due to rising OPEC+ production and concerns about demand.
By Charles Kennedy for Oilprice.com
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