Crude oil prices fell on Tuesday, reversing gains from the previous session, as optimism surrounding Ukraine peace negotiations weighed on the market. The anticipation of increased supply, coupled with concerns over weak demand, contributed to a fourth consecutive monthly decline in crude futures.
On the MCX, crude oil traded around ₹5,236 per barrel, touching a high of ₹5,254 and a low of ₹5,229. Asian markets followed Wall Street’s lead, driven by hopes of potential Federal Reserve easing.
Market Performance: Global Crude Benchmarks
- Brent crude oil: Rose 0.50% to $63.06 per barrel
- US West Texas Intermediate (WTI): Climbed 0.46% to $58.57 per barrel
Earlier in the week, both benchmarks had bounced 1.3%, recovering from one-month lows. Positive market sentiment was supported by hopes of a Federal Reserve rate cut in December and expectations of Chinese economic stimulus aimed at boosting the housing market.
Factors Behind Falling Crude Oil Prices
Several key dynamics have contributed to the downward pressure on crude prices:
- Oversupply Concerns: Non-OPEC production, especially from US shale, remains strong. Combined with sufficient global inventories, this has limited price gains.
- Ukraine–Russia Peace Talks: Progress in negotiations has reduced the geopolitical risk premium, lowering the pressure on oil prices when optimism rises.
- Weak Global Demand: Slower economic growth in Europe and parts of Asia has created cautious market sentiment, keeping bullish pressure in check.
The potential peace agreement could also reduce sanctions on Russia, which may limit any sharp upward movement in crude oil prices.
Crude Oil Outlook
Crude oil continues to show volatility, reflecting the balance between geopolitical developments, supply dynamics, and economic indicators. The combination of peace talks, global supply, and demand trends will likely keep prices in a narrow band, with intraday movements reacting to news flow and macroeconomic cues.
Summary: Key Takeaways
- Crude oil prices fell amid Ukraine peace optimism and weak demand concerns.
- MCX crude traded near ₹5,236 per barrel, with minor intraday swings
- Brent crude: $63.06, WTI: $58.57
- Oversupply, geopolitical factors, and cautious global demand are keeping prices under pressure.
- Futures are tracking a fourth consecutive monthly decline, the longest since 2023
The recent developments highlight how sensitive crude oil markets remain to geopolitical news, supply fluctuations, and global economic trends.
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