Crude oil prices extended their decline on Tuesday, dropping below the $60 per barrel mark, driven by optimism over a potential Russia-Ukraine peace deal and weak economic data from China.
At 1023 GMT, Brent crude futures fell 1.8% to $59.45 a barrel, reaching its lowest price since May this year. US West Texas Intermediate (WTI) crude saw a similar drop, trading nearly 2% lower at $55.71 a barrel.
The main downward pressure stems from strengthening prospects for an end to the Russia-Ukraine conflict, fueled by reports of negotiation progress and a US offer of NATO-style security guarantees for Kyiv. Traders fear that a peace deal could rapidly release additional Russian oil volumes onto the market, exacerbating global oversupply concerns.
However, Russia’s Deputy Foreign Minister Sergei Ryabkov tempered this optimism by stating the country was unwilling to make any territorial concessions.
Weak Chinese Economic Data
Adding to the bearish sentiment, weak economic indicators from China released on Monday highlighted concerns about inadequate global oil demand. China’s official data showed factory output growth slowing to a 15-month low, with retail sales also expanding at their slowest pace since late 2022.
While a recent US seizure of an oil tanker off Venezuela provided minor, offsetting supply fears, the market remains capped by a global glut of floating storage and a surge in pre-sanction Chinese buying from Venezuela.
