Oil prices increased on Monday as investors assessed the outcome of discussions between the US and Ukrainian presidents regarding a potential agreement to end the conflict in Ukraine. The talks, which took place at US President Donald Trump’s Mar-a-Lago resort in Florida, aimed to resolve the ongoing war, but a key issue remains the fate of the disputed Donbas region.
According to US President Donald Trump, the two leaders are “getting a lot closer, maybe very close” to reaching an agreement, although he acknowledged that the negotiations’ success will be determined “in a few weeks.” Despite the progress, a Russia-Ukraine peace deal may remain stalled due to unresolved territorial issues, said Mingyu Gao, energy and chemical chief researcher at China Futures Co. Ltd.
The increase in oil prices can be attributed to various factors, including geopolitical tensions in the Middle East. Russia and Ukraine have continued to target each other’s energy infrastructure, while Saudi air strikes in Yemen and Iran’s statement about being in a “full-scale war” with the US, Europe, and Israel have also contributed to the uncertainty. As a result, Brent crude futures rose by 63 cents to $61.27 per barrel, and US West Texas Intermediate crude increased by 58 cents to $57.32.
The prices had fallen by over 2% on Friday due to concerns about a potential global supply glut and the possibility of a Ukraine peace deal. However, the current tensions have led to market concerns about possible supply disruptions. Analyst Tony Sycamore from IG noted that WTI is expected to trade within a range of $55-$60, with the market also keeping an eye on US enforcement actions against Venezuelan oil shipments and the fallout from the US military strike against ISIS targets in Nigeria, which produces approximately 1.5 million barrels per day.
The ongoing conflict in Ukraine and tensions in the Middle East have significant implications for the global oil market. The situation remains uncertain, and investors will be closely monitoring the developments in the region. As the negotiations between the US and Ukrainian presidents continue, the outcome will have a substantial impact on the oil prices and the overall energy market.