[BEIJING] Oil prices rose on Monday (Dec 29) as investors weighed the outcome of talks between the US and Ukrainian presidents on a potential deal to end the war in Ukraine, as well as Middle East tensions that could disrupt supply.
Brent crude futures rose 63 US cents, or 1.04 per cent, to US$61.27 per barrel at 12.43 pm, while US West Texas Intermediate (WTI) crude was up 58 US cents, or 1.02 per cent, to US$57.32.
Both benchmark prices fell more than 2 per cent on Friday as investors weighed a looming global supply glut and the possibility of a Ukraine peace deal ahead of weekend talks between Ukrainian President Volodymyr Zelensky and US President Donald Trump.
US President Donald Trump said on Sunday that he and Ukrainian President Volodymyr Zelensky were “getting a lot closer, maybe very close” to an agreement to end the war in Ukraine, while acknowledging that the fate of the disputed Donbas region remains a key unresolved issue.
The two leaders spoke at a joint press conference late Sunday afternoon after meeting at Trump’s Mar-a-Lago resort in Florida. Trump said that it will be clear “in a few weeks” whether negotiations to end the war will succeed.
The peace talks did not reach an agreement on territorial issues, so a Russia-Ukraine peace deal may remain deadlocked with no quick breakthrough, said Mingyu Gao, energy and chemical chief researcher at China Futures.
The reason prices are rising also includes that geopolitical tensions remain elevated, as Russia and Ukraine continued striking each other’s energy infrastructure over the weekend, said Yang An, a China-based analyst at Haitong Futures.
“The Middle East has also been unsettled recently, with Saudi air strikes in Yemen and Iran saying the country is in a ‘full-scale war’ with the US, Europe, and Israel. This may be what’s driving market concerns about potential supply disruptions,” Yang added.
WTI is expected to trade within a US$55 to US$60 range with an eye also on US enforcement actions against Venezuelan oil shipments and any fallout from the US military strike against ISIS targets in Nigeria, which produces about 1.5 million barrels per day, IG analyst Tony Sycamore said in a note. REUTERS
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