DTN Oil Update
Oil Futures Drop Amid Ukraine-Russia Peace Talks Progress
SECAUCUS, N.J. (DTN) -- Crude oil futures tumbled more than 2% by Friday's close, reversing a steady morning session. The drop followed reports of significant progress in Ukraine peace talks, fueling expectation that lifted Russian sanctions could add millions more barrels to an already oversupplied market.
Ukrainian President Volodymyr Zelenskyy is scheduled to meet with U.S. President Donald Trump in Florida this weekend to finalize a U.S.-led 20-point peace framework, according to the reports. The peace plan was "90% ready" and includes significant concessions, such as the creation of demilitarized zones and "special economic zones" in the contested Donbas region, Zelenskyy was quoted saying.
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The proposal marks a shift in Kyiv's stance as it appears willing to accept at least some of Moscow's demands to end the nearly four-year conflict caused by Russia's invasion.
Meanwhile, Reuters reported Russian President Vladimir Putin expressed today his willingness to swap some territory controlled by Russian forces in Ukraine.
A lifting of U.S. and European sanctions on Russia's oil trade could free up embargoed crude cargoes that are now trapped at sea. The International Energy Agency has forecast the global crude oil glut in 2026 at 3.84 million barrels per day (bpd), excluding the additional Russian supply.
Crude futures pared almost all of the advances they had made for the week, with the progress in peace talks.
The NYMEX WTI futures contract for February delivery settled Friday's session down $1.61, or 2.8%, at $56.74 barrel (bbl). For the week, it rose 0.1%.
The ICE Brent contract for February fell $1.60, or 2.6%, to $60.64 bbl, while posting a weekly increase of 0.3%.
So far this year, WTI and Brent have dropped more than 17%, putting them on track to their sharpest annual loss since 2020, the year of the coronavirus outbreak.
The front-month ULSD contract slid $0.0515, or 2.4%, on the day to $2.1061 gallon.
RBOB futures contract for January shipments dipped $0.0507, or 2.9%, to $1.6964 gallon.
