Oil Holds Near Lowest Since 2021 With Focus On Ukraine Ceasefire

Oil held near the lowest level since 2021 as traders weighed the outlook for a ceasefire in Ukraine, which could pave the way for fewer curbs on Russian crude flows into an already oversupplied market.

West Texas Intermediate traded near $57 a barrel after closing at the lowest in more than four years on Monday. Brent settled below $61. US President Donald Trump said a deal to end Russia’s war in Ukraine is closer than ever following talks with Ukraine’s Volodymyr Zelenskiy and European leaders.

Oil is on track for a yearly loss on expectations for a swelling global surplus as OPEC+ brings back idled production and other producers pump more. A deal that ends the war could lead to the US relaxing sanctions on Russia, though Moscow has largely kept its crude flowing since the war began in early 2022.

Zelenskiy’s top security official, Rustem Umerov, cited “real progress” in Berlin after the Ukrainian leader and his team held a second day of discussions. Talks lasted about five hours, and US officials were led by special envoy Steve Witkoff and Jared Kushner, President Trump’s son-in-law.

Still, it’s unclear whether the new US effort will be enough to overcome the hurdles that have derailed previous talks. Russian leader Vladimir Putin hasn’t budged from his demands about seizing vasts swathes of territory.

"We are not convinced we are practically much closer to an actual peace deal here, even if it feels like we have lurched a lot closer in the last few days," said Robert Rennie, head of commodity research at Westpac Banking Corp. "We see Brent remaining in a volatile $60-65 range."

Meanwhile, signs of the glut are showing up across the globe. A corner of the US crude market closely watched by physical traders is signalling oversupply, while the Middle East market has weakened in recent weeks.