Crude oil prices experienced a significant downturn overnight, driven by indications of softening demand and a lessening of supply concerns. Brent crude, a global benchmark, fell by 2 per cent to settle at $US63.58 per barrel. ANZ reported that geopolitical risks seemed to abate following news that Ukraine’s President Volodymyr Zelensky had arrived in Turkey to resume negotiations with Russia.
Further contributing to the eased supply concerns was a report from Axios stating that the United States has been consulting with the Kremlin to develop a new peace plan. According to ANZ, these developments helped mitigate the impact of US sanctions imposed on two of Russia’s largest oil companies, Rosneft and Lukoil.
Adding to the downward pressure on prices were signs of weakening demand within the United States. The Energy Information Administration’s latest weekly inventory report revealed that stockpiles of both petrol and distillates in the US had increased for the first time in more than a month. This build in inventories signals a potential slowdown in consumption, further weighing on market sentiment and contributing to the overall price decline.
