Oil prices drop as peace talk hopes pressure markets
Brent and WTI crude futures fell on Thursday amid expectations of progress in the Russia-Ukraine and Middle East conflicts.
Oil prices fell by more than $1 on Thursday as markets reacted to potential progress in peace negotiations regarding the Russia-Ukraine and Middle East wars, according to the Economic Times. Brent futures declined 1.2 per cent to $91.62 a barrel, while US West Texas Intermediate (WTI) crude fell 1.2 per cent to $85.49 a barrel.
Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, said markets are falling on expectations of behind-the-scenes efforts to secure a ceasefire between Russia and Ukraine. He also noted that an escalation of the Iran war seems unlikely before the US-China summit next week, though he cautioned that uncertainty regarding the Strait of Hormuz means a significant market collapse is unlikely.
In Abu Dhabi, Russian and Ukrainian negotiators agreed to a major prisoner exchange during peace talks that concluded on Wednesday. However, US mediators stated that differences remain on other major issues, such as territory. Ukrainian President Volodymyr Zelenskiy said Kyiv hopes to achieve concrete results on resolving the war this year.
Regarding Iran, security chief Mohsen Rezaei said in televised remarks that the country will not allow enriched nuclear material to leave. He stated there would be consequences if the US launches new strikes. US officials have downplayed the need for further military strikes, though Washington maintains that nuclear issues must be part of initial negotiations to end the eight-month-old war.
