Oil prices remain stable at their lowest level in more than four years, Russian-Ukrainian cease-fire negotiations affect market nerves

The Zhitong Finance App learned that on Tuesday, oil prices remained near their lowest level since 2021, and traders are closely evaluating the prospects for a cease-fire in Ukraine — this move may pave the way for the easing of restrictions on Russian crude oil exports, yet the global market is already oversupplied.

After closing at its lowest level in more than four years on Monday, WTI crude oil is now hovering around $57 per barrel; Brent crude is approaching $60 per barrel. US President Trump said that after talks with Ukrainian President Zelensky and the leaders of many European countries, the agreement to end the Russian-Ukrainian conflict is “closer than ever before.”

Oil prices are falling from year to year as the market anticipates that global oversupply will continue to increase. Currently, OPEC+ is gradually recovering idle production capacity, and other oil producers are also expanding production. Although Russian crude oil exports have generally remained stable since the conflict broke out in early 2022, if a cease-fire agreement is reached in the Russian-Ukrainian conflict, it may cause the US to ease sanctions against Russia.

Zelensky's senior security adviser Rustem Umerov said in Berlin that the Ukrainian delegation held talks with relevant parties on the second day and “substantial progress” had been made. The talks lasted about five hours, and the US delegation was led by special envoy Steve Witkoff and the president's son-in-law Jared Kushner.

However, it is unclear whether the negotiations promoted by the US will be sufficient to clear the obstacles that have previously caused the negotiations to stall. Russian President Vladimir Putin has never made concessions on his core claim to seize large tracts of territory.

Robert Rennie, head of commodity research at Westpac Bank, said, “Although there seems to be a breakthrough in the recent situation, we don't think an actual peace agreement is within easy reach. Brent crude oil is expected to remain in the fluctuation range of $60 to $65 per barrel.”

At the same time, signs of a global oversupply of crude oil are becoming more and more obvious. Key parts of the U.S. crude oil market that have received close attention from physical traders have sent signals of oversupply, while the Middle East crude oil market has also shown a weak trend in recent weeks.