Oil prices declined on Monday, extending last week’s losses, as signs of progress in Russia-Ukraine peace talks and a stronger U.S. dollar weighed on the market.
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Brent crude futures slipped 14 cents, or 0.22%, to $62.42 per barrel at 0148 GMT, while West Texas Intermediate (WTI) dropped 15 cents, or 0.26%, to $57.91 a barrel.
Both benchmarks shed around 3% last week, touching their lowest closing levels since October 21. The downturn came amid growing expectations that a peace agreement could ease sanctions on Russia, unlocking significant volumes of previously restricted crude.
“The sell-off was triggered mainly by President Trump’s forceful push for a Russia-Ukraine peace deal, which markets see as a fast track to unlocking substantial Russian supply,” IG analyst Tony Sycamore wrote in a note. He added that optimism around the negotiations outweighed near-term supply disruptions stemming from new U.S. sanctions on Rosneft and Lukoil, which took effect Friday and have left nearly 48 million barrels of Russian crude stranded at sea.
On Sunday, the U.S. and Ukraine reported progress in talks on a peace plan that could require Kyiv to cede territory and halt its NATO ambitions. President Donald Trump has set a Thursday deadline, though European leaders are advocating tougher terms.
A peace deal could roll back sanctions that have curbed Russian oil exports. Russia was the world’s second-largest crude producer after the U.S. in 2024, according to the U.S. Energy Information Administration.
Broader market sentiment remained cautious, with concerns over additional supply and uncertainty surrounding U.S. interest rate cuts dampening investor appetite. However, expectations of a rate cut next month grew after New York Federal Reserve President John Williams signaled a reduction “in the near term.”
The U.S. dollar index (.DXY) strengthened further, heading for its biggest weekly rise in six weeks and reaching its highest level since late May. A stronger dollar typically makes oil more expensive for holders of other currencies, adding pressure to prices.
