Quantum Commodity Intelligence – Crude oil futures Thursday were trending lower after US President Donald Trump said that talks to end the war in Ukraine would start “immediately”.
Front-month Apr25 ICE Brent futures were trading at $74.80/b (1610 GMT) versus Wednesday’s settle of $75.18/b, surrendering most of the early-week gains.
At the same time Mar25 NYMEX WTI was trading at $71.11/b, compared to Wednesday’s close of $71.37/b, with markets in the red for most of the day.
Oil extended midweek losses following details of Trump’s call with Russian President Vladimir Putin on Wednesday, which were described as “lengthy and highly productive” and further plans for the two leaders to meet in Saudi Arabia.
Analysts said that negotiations to end the war would likely involve a softening of sanctions on Russian oil supplies, although timelines are unclear.
Moscow has largely found workarounds to avoid sanctions, typically producing at or above its OPEC+ quota, which would likely mean the overall oil balance would not dramatically change following a peace deal.
Fed
Oil markets were also rattled following hawkish remarks from Fed Chair Jerome Powell, signalling a slower pace of rate cuts this year as inflation remains stubbornly high.
Powell told the House Financial Services Committee that the Fed had made “great progress” on inflation since the peaks “but we’re not quite there yet.”
This was compounded by latest inflation figures showing the January consumer price index report post a 0.5% monthly gain, pushing the annual rate to 3%, a touch higher than December and only slightly lower than the 3.1% reading in January 2024.
Core inflation, which excludes food and energy, came in even higher at 3.3%, further dampening prospects for rate cuts in the near future.
This week’s industry data also provided little solace after the API reported a 9 million barrel build in crude stocks. The EIA had a smaller crude build of 4 million barrels, but did little to stem the slide.