Stability of U.S. Oil Prices Near Their Lowest Level

SadaNews - U.S. oil prices have stabilized near their lowest level since 2021, as traders assess the prospects of reaching a ceasefire in Ukraine, which could pave the way for easing restrictions on Russian oil flows to a market already suffering from a surplus.

West Texas Intermediate crude traded near $57 per barrel, after closing on Monday at its lowest level in over four years. Brent crude also approached $60 per barrel.

U.S. President Donald Trump stated that reaching an agreement to end the war in Ukraine is closer than ever, following talks with Ukrainian President Volodymyr Zelensky and European leaders.

Supply Surplus Pressures Prices

Oil is on track to record an annual loss, amid expectations of a widening global surplus as the "OPEC+" coalition resumes previously halted production, and increases supply from other producers.

Any agreement to end the war could lead the U.S. to ease sanctions imposed on Russia, although Moscow's oil has largely continued to flow to the market since the start of the war in early 2022.

Ukrainian National Security Advisor Rustem Umerov indicated "real progress" was made in Berlin, after the Ukrainian president and his team held a second day of talks.

The discussions lasted about five hours, led by U.S. envoy Steve Witkoff and Jared Kushner, President Trump's son-in-law.

Putin Has Not Backed Down from His Demands

However, it remains unclear whether the new U.S. efforts are sufficient to overcome the obstacles that derailed previous talks, as Russian President Vladimir Putin has not backed down from his demands for control over vast territories.

Robert Rennie, head of commodities research at "Westpac Banking Corp", said: "We are not convinced that we have practically become much closer to an actual peace agreement, even if it seems we have made significant progress in recent days." He added: "We see Brent crude moving within a fluctuating range of $60 to $65."

Meanwhile, signs of a global supply surplus are beginning to appear. One corner of the U.S. oil market, closely monitored by traders, indicates an overabundance of supplies, while the Middle East market has seen a decline in recent weeks.