Oil prices rebound as Ukraine ceasefire remains uncertain
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Oil markets saw a modest recovery on Friday, reversing some of the previous session’s losses, as uncertainty over a Ukraine ceasefire deal raised doubts about the near-term return of Russian energy supplies. Brent crude futures rose 0.9% to $70.52 per barrel, while WTI gained 1.1% to $67.26 per barrel, rebounding after a sharp decline on Thursday.
The outlook for a ceasefire between Russia and Ukraine remains clouded. Russian President Vladimir Putin expressed conditional support for a U.S.-proposed 30-day ceasefire, but the lack of immediate progress reduced market optimism. Additionally, the U.S. administration allowed energy transaction licenses with Russian financial institutions to expire, effectively tightening restrictions on Russian oil trade. In response, Chinese state firms have reportedly reduced their Russian oil purchases, adding further supply concerns.
Despite these geopolitical tensions, fundamental market indicators remain bearish. The International Energy Agency (IEA) warned that global oil supply is expected to exceed demand by 600,000 barrels per day in 2025, driven by U.S. production growth and weaker-than-expected consumption. The agency downgraded its demand forecasts for Q4 2024 and Q1 2025, citing deteriorating macroeconomic conditions amid escalating trade tensions.
Meanwhile, the global trade war continues to impact sentiment, with President Trump threatening a 200% tariff on European alcohol imports, adding to concerns about broader economic disruption. Additionally, U.S. sanctions on Iran’s Oil Minister Mohsen Paknejad have further strained diplomatic relations, while China and Russia remain firm in their stance against U.S. demands for nuclear talks with Tehran.
While short-term price projections remain skewed to the downside, geopolitical instability could still drive supply disruptions, creating volatility in oil markets. Investors will closely monitor further developments in Ukraine negotiations, U.S. trade policies, and potential supply constraints from Russia and Iran as key factors influencing crude price direction.
The outlook for a ceasefire between Russia and Ukraine remains clouded. Russian President Vladimir Putin expressed conditional support for a U.S.-proposed 30-day ceasefire, but the lack of immediate progress reduced market optimism. Additionally, the U.S. administration allowed energy transaction licenses with Russian financial institutions to expire, effectively tightening restrictions on Russian oil trade. In response, Chinese state firms have reportedly reduced their Russian oil purchases, adding further supply concerns.
Despite these geopolitical tensions, fundamental market indicators remain bearish. The International Energy Agency (IEA) warned that global oil supply is expected to exceed demand by 600,000 barrels per day in 2025, driven by U.S. production growth and weaker-than-expected consumption. The agency downgraded its demand forecasts for Q4 2024 and Q1 2025, citing deteriorating macroeconomic conditions amid escalating trade tensions.
Meanwhile, the global trade war continues to impact sentiment, with President Trump threatening a 200% tariff on European alcohol imports, adding to concerns about broader economic disruption. Additionally, U.S. sanctions on Iran’s Oil Minister Mohsen Paknejad have further strained diplomatic relations, while China and Russia remain firm in their stance against U.S. demands for nuclear talks with Tehran.
While short-term price projections remain skewed to the downside, geopolitical instability could still drive supply disruptions, creating volatility in oil markets. Investors will closely monitor further developments in Ukraine negotiations, U.S. trade policies, and potential supply constraints from Russia and Iran as key factors influencing crude price direction.