Crude oil prices experienced a sharp decline overnight following reports suggesting progress towards a revised peace agreement between Ukraine and Russia, according to ANZ. Initial reports indicated that Kyiv had potentially agreed to terms aimed at resolving the conflict, which has been ongoing for nearly four years. However, President Volodymyr Zelenskiy has since tempered expectations, stating that discussions with the United States are still in progress and significant issues remain unresolved.
ANZ noted that the resolution of the conflict could have substantial consequences for global energy markets. Russia is a major oil producer, although its exports to Western nations have been significantly limited by sanctions. The bank also stated that it is unsure whether a peace deal would lead to a rise in the availability of crude oil on the market.
The price of gas also decreased. European benchmark futures saw a further drop due to expectations that Russian gas could re-enter the global market. This coincided with forecasts of milder weather in early December. The less severe weather could enable European utilities to further replenish their inventories, despite storage levels currently being below the EU’s 90 per cent target for 1 December.
Brent Crude Oil was last trading down by 1.5 per cent at $US62.44 per barrel.
