Oil down with focus on Ukraine peace deal

WTI crude oil futures fell to $58.5 per barrel on Tuesday, trimming gains from the previous session, as prospects for a potential Russia–Ukraine peace agreement continued to steer market sentiment.

Reports indicate that the US-proposed 28-point peace plan aimed at ending the conflict has been narrowed to 19 points following negotiations in Switzerland, an effort to make the framework more acceptable to Ukraine.

However, it remains unclear which specific provisions were removed, leaving markets cautious about how close the parties truly are to a breakthrough.

Analysts note that if a deal does eventually take shape, it could pave the way for a partial rollback of sanctions on Russian oil, potentially returning substantial barrels to global markets at a time when the industry is already preparing for a significant supply surplus in 2025.

The possibility of renewed Russian flows has added downward pressure to prices, despite near-term economic optimism.

On Monday, WTI crude had climbed 1.3%, supported by growing expectations that the Federal Reserve could begin cutting interest rates next month. A rate cut would likely stimulate economic activity, weaken the dollar, and strengthen fuel consumption—factors that generally support higher oil demand.

Despite this, traders remain focused on geopolitical developments, which continue to overshadow broader macroeconomic signals.