Oil extends decline by 1.5% on hopes for Russia-Ukraine peace deal.
Oil prices fell 1.5% on Friday, extending declines for a third straight session as the United States pushed for a Russia-Ukraine peace deal that could swell global market supply, while uncertainty over its rate cuts curbed investors’ risk appetite.
Brent crude futures fell 93 cents, or 1.5%, to US$62.45 (RM258.95) a barrel by 0416 GMT, after slipping 0.2% in the previous session. US West Texas Intermediate was down 1.7%, or 98 cents, at US$58.02 a barrel, after ending Thursday down 0.5%.
Both contracts are set to fall more than 2.5% this week on oversupply concerns, erasing most of last week’s gains.
Market sentiment turned bearish as Washington pushed for a peace plan between Ukraine and Russia to end the three-year war, while sanctions on top Russian oil producers Rosneft and Lukoil are set to take effect on Friday.
“Oil extended declines as Zelenskiy agreed to work on a US- and Russia-drafted peace plan, with US sanctions on two Russian oil majors due Friday,” Saxo analysts said in a client note, referring to Ukrainian President Volodymyr Zelenskiy.
A stronger dollar was also depressing oil prices, as it makes the dollar-denominated commodity more expensive for holders of other currencies.
Dollar strength against Asian currencies was very evident after investors further downplayed odds of a follow-up rate cut at the December Federal Open Market Committee (FOMC), following the release of minutes from its very divided October meet, UOB analysts said in a client note.
The dollar was on track for its best week in more than a month on Friday, as investors wagered that the US Federal Reserve is unlikely to cut rates next month.
Source: Theedgemalaysia
