Oil Slips as US Security Guarantees for Kyiv Boost Hopes of Russian Supply Return

Oil prices fell on Tuesday, with Brent dropping below $60 a barrel as markets weighed signs of momentum in Russia-Ukraine peace talks and weak Chinese economic data, according to Reuters on December 16.

Brent crude futures were down 81 cents, or about 1.3%, at $59.75 a barrel, while US West Texas Intermediate was down 84 cents, or nearly 1.5%, at $55.98. Both contracts were near their lowest levels since May.

“Brent  has dropped this morning to below $60 per barrel for the first time in months, as the market assesses a potential peace deal resulting in additional Russian volumes becoming available and oversupplying the market further,” Rystad analyst Janiv Shah said.

China’s factory output growth slowed to a 15-month low and retail sales growth was the weakest since December 2022, official data showed, adding to concerns about demand, Reuters said.

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War in Ukraine

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The report added that oversupply fears were only marginally offset by the US seizure of an oil tanker off Venezuela last week, as traders and analysts pointed to a glut of floating storage and a surge in Chinese buying from Venezuela in anticipation of sanctions as factors limiting the market impact.

Earlier, it was reported that some European officials were weighing a resumption of Russian gas imports amid ceasefire discussions, citing pressure from tighter supplies and the risk that renewed energy flows could ease financial strain on Moscow.

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