Oil declined more than 2% amid diplomatic efforts on the Ukraine war
The US brokered negotiations between Russia and Ukraine in a bid to end the ongoing war, raising speculation over the potential easing of sanctions that have been curbing Russian crude exports.
Crude oil prices fell sharply on Wednesday, February 13, 2025, as renewed diplomatic efforts by the US to mediate the Ukraine conflict raised concerns over a potential reduction in the geopolitical risk premium.
Brent futures dropped by $1.82, or 2.36% to settle at $75.18/barrel.
WTI slipped by $1.95, or 2.66% to close at $71.37/barrel.
The US brokered negotiations between Russia and Ukraine in a bid to end the ongoing war, raising speculation over the potential easing of sanctions that have been curbing Russian crude exports. A ceasefire agreement, if realised, could challenge the durability of existing US sanctions, which have already begun to disrupt Russian oil flows.
Market sentiment was further weighed down by strong US inflation data, which heightened concerns over persistent price pressures. The risk of an overheating economy and potential trade tariffs has dampened expectations of imminent interest rate cuts, adding to fears of slower economic growth and weaker oil demand.
Additionally, a larger-than-expected build in US crude inventories exerted further downward pressure on prices. The Energy Information Administration (EIA) reported a stockpile increase of 4.1 million barrels last week, exceeding market forecasts and reinforcing concerns over demand weakness.
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Written by: Muhammad Hafiz