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Oil prices rise as ceasefire agreement in Ukraine remains elusive

Oil prices rise as ceasefire agreement in Ukraine remains elusive

The oil prices recovered some of the more than 1% loss they suffered in the previous session. This was partly due to the diminishing prospect of an end to the Ukraine conflict that would bring more Russian energy back.

Brent crude futures were up 46 cents or 0.7% to $70.34 per barrel at 0406 GMT, after closing 1.5% lower the previous session. U.S. West Texas Intermediate Crude was at $67.03 per barrel, up 48c or 0.7% after closing 1.7% lower on Thursday.

Vladimir Putin, the Russian president, said that Moscow supports a U.S. ceasefire proposal in Ukraine but that it has a few conditions and clarifications that appear to prevent a rapid end to the fighting.

Tony Sycamore, IG's market analyst, said that "Russian support for a 30-day truce with Ukraine has decreased confidence in a short-term ceasefire."

The feeling is that the U.S. will not lift sanctions until a ceasefire has been agreed.

The global trade war, which has caused financial markets to be roiled and sparked recession fears, is intensifying. On Thursday, U.S. president Donald Trump threatened to slap 200% tariffs on wine, cognac, and other alcohol imported from Europe.

The International Energy Agency warned Thursday that the global oil supply may exceed demand this year by 600,000 barrels a day due to a growth in demand led by America and fewer than expected global consumers.

The IEA stated that "the macroeconomic conditions which underpin our oil consumption projections deteriorated in the last month as trade tensions increased between the U.S.A. and other countries." This led the IEA to lower its estimates of demand growth for the fourth and first quarters of 2025.

Oil prices fell on Friday due to the Trump-driven trade conflict woes, and concerns about demand. However, the prospect of less Russian oil being available in the short term helped cushion the market.

In a client note, ANZ analysts stated that "most price projections are to the downside over the short-term but geopolitical tensions could still cause disruptions in supply." Reporting by Florence Tan Editing and proofreading by Shri Navaratnam

(source: Reuters)