Noor Trends News, Technical Analysis, Educational Tools and Recommendations
Oil prices fell in Asian trading on Thursday as U.S. President Donald Trump signaled potential progress toward a peace treaty between Russia and Ukraine. The possibility of an agreement raised expectations that U.S. sanctions on Russian crude could be lifted, increasing global oil supply. Meanwhile, a higher-than-expected U.S. consumer inflation reading fueled concerns that interest rates would remain elevated for longer, adding downward pressure on oil markets.
As of 01:35 GMT, Brent crude futures for April delivery declined 0.9% to $74.51 per barrel, while West Texas Intermediate (WTI) crude futures dropped 0.9% to $70.61 per barrel.
Russia-Ukraine Peace Prospects Weigh on Oil
Trump stated on Wednesday that both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy had expressed interest in ending the ongoing conflict. Following separate conversations with both leaders, Trump instructed senior U.S. officials to initiate peace negotiations.
The announcement followed comments from U.S. Defense Secretary Pete Hegseth, who indicated that Ukraine would no longer seek NATO membership or attempt to reclaim all Russian-occupied territories—two key factors that contributed to Russia’s 2022 invasion.
A potential peace deal has broad market implications, including reduced geopolitical risks and the potential lifting of U.S. sanctions on Russian crude exports. This scenario would increase global oil supply, leading traders to price in a reduced risk premium, further pressuring oil prices.
Inflation and Tariff Concerns Add to Market Jitters
Beyond geopolitical developments, oil markets reacted to hotter-than-expected U.S. consumer price index (CPI) inflation data. The strong reading reinforced expectations that the Federal Reserve would maintain higher interest rates for longer, potentially slowing economic growth and dampening demand for fuel in the world’s largest oil consumer.
Additionally, Trump’s latest trade policies added uncertainty to the market. After imposing tariffs on steel and aluminum imports earlier in the week, he also threatened broader retaliatory tariffs against key U.S. trading partners. These moves raised concerns about potential trade disruptions, which could weigh on global economic activity and energy demand.
Despite the market downturn, weaker oil prices align with Trump’s broader goal of controlling inflation, as lower crude prices typically translate into reduced fuel costs for consumers.
U.S. Inventory Data Reflects Higher Stockpiles
Adding to bearish sentiment, U.S. inventory data showed a larger-than-expected buildup in crude stockpiles, indicating softer demand. The increase in supply further pressured oil prices, reinforcing concerns over short-term market weakness.
With geopolitical shifts, economic indicators, and policy decisions all influencing crude markets, traders remain focused on upcoming developments, including potential updates on peace negotiations and the Federal Reserve’s next moves regarding interest rates.
