(Bloomberg) — Oil extended losses after US President Donald Trump and his counterpart Vladimir Putin agreed to talks on ending the war in Ukraine, raising speculation that risks to Russian supply may ease.
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Brent dropped below $75 per barrel after falling 2.4% on Wednesday, the most in more than two months, while West Texas Intermediate was near $71. Trump said negotiations would start immediately, and that he would probably meet Putin in Saudi Arabia in the “not-to-distant future,” according to a social media post.
“I am a lot more skeptical that negotiations will take place sooner rather than later,” said Wayne Gordon, regional chief investment officer at UBS Group AG in Singapore. “It’s very early to be pricing it all in.”
US sanctions on Moscow’s oil sector have disrupted the flow of Russian crude, which helped to underpin gains in global oil benchmarks earlier this year. The market, however, has been swept up in Trump’s various tariff salvos, which have weighed on sentiment and prices over the past three weeks.
The president’s trade policies risk stoking volatility in global markets, and has the potential to create supply-demand imbalances that are not reflective of fundamentals, OPEC said in a monthly report on Wednesday. The release also showed that several members are better implementing supply curbs.
The International Energy Agency is scheduled to provide a snapshot on the market later Thursday, including the supply and demand outlook.
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