WTI price weakens amid oversupply fears following potential Russia-Ukraine ceasefire talks.
President Trump stated that Ukraine and Russia are preparing to begin immediate ceasefire negotiations, potentially without US involvement.
The PBoC lowered both the one- and five-year Loan Prime Rates by 10 basis points, to 3.0% and 3.5%, respectively.
West Texas Intermediate (WTI) Oil price is trading around $62.00 per barrel during the early European session on Tuesday, retreating after two consecutive days of gains. The pullback comes as markets evaluate the possible effects of a Russia-Ukraine ceasefire on global Oil supply.
According to Reuters, US President Donald Trump announced on Monday that following a phone call with Russian President Vladimir Putin, Ukraine and Russia are set to begin immediate ceasefire talks—potentially without US involvement. Any relaxation of sanctions on Russia could lead to increased oil exports, adding to an already oversupplied global market.
Adding further pressure to Oil prices, Moody’s downgraded the US sovereign credit rating, clouding the economic outlook for the world's largest Oil consumer. In addition, weaker-than-expected industrial production and retail sales in China, currently the top Oil importer, have reinforced bearish sentiment.
At its May policy meeting, the People’s Bank of China (PBoC) lowered both the one-year loan prime rate and the five-year loan prime rate by 10 basis points, to 3.0% and 3.5%, respectively. The widely anticipated cuts, which brought both rates to record lows, are part of Beijing’s broader monetary easing strategy aimed at revitalizing a sluggish economy amid escalating trade tensions. These measures may offer some support to Oil demand in the longer term.
Meanwhile, geopolitical tensions remain elevated as Iran's Deputy Foreign Minister Majid Takhtravanchi warned that negotiations with the US would “lead nowhere” if Washington insists on a full halt to Tehran’s uranium enrichment.
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