Oil prices drop amid hopes for Ukraine peace deal, rising US inventories

13 Feb 2025 12:00

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Economics
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Oil prices drop amid hopes for Ukraine peace deal, rising US inventories

Photo: Reuters

Oil prices fell by approximately 1% on Thursday, driven by expectations that a potential peace agreement between Ukraine and Russia could lead to the lifting of sanctions disrupting supply chains.

Additionally, an increase in crude inventories in the United States added to the downward pressure on prices, News.Az reports, citing Reuters.

Brent futures were down 81 cents, or 1.1%, at $74.37 a barrel by 0735 GMT, while U.S. West Texas Intermediate (WTI) crude dropped 81 cents, or 1.1%, to $70.56.

Brent and WTI fell more than 2% on Wednesday after U.S. President Donald Trump said Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy expressed a desire for peace in separate phone calls with him, and Trump ordered top U.S. officials to begin talks on ending the war in Ukraine.

Russia is the world's third-largest oil producer and sanctions imposed on its crude exports as a result of its invasion of Ukraine nearly three years ago have supported higher prices.

A build in crude oil inventories in the United States, the world's biggest crude consumer, also weighed on the market. U.S. crude stocks rose more than expected last week, data from the Energy Information Administration (EIA) showed on Wednesday.

Crude inventories rose by 4.1 million barrels to 427.9 million barrels in the week ended Feb. 7, the EIA said, beating analysts' expectations in a Reuters poll for a 3-million-barrel rise.

Trump's threat of additional tariffs against U.S. trade partners also pressured prices, amid inflation jitters and concerns that it may reduce economic growth and therefore oil demand.

News.Az