FX.co ★ Oil Holds at Lowest Since 2021

WTI crude oil futures held steady at $56.6 per barrel on Tuesday, marking the lowest point since early 2021. This shift is attributed to anticipations of an oversupplied market coupled with optimism surrounding a possible peace agreement in Ukraine. On Monday, United States officials indicated that discussions between Russia and Ukraine have advanced, suggesting a potential resolution may be within reach. The U.S. has also expressed willingness to offer security guarantees to Kyiv, though territorial disagreements persist. Should an agreement be finalized, it may lead to the lifting of U.S. sanctions on Russian oil, which could introduce more barrels to an already saturated global market. Concurrently, supply pressure continues to mount as OPEC+ members resume previously paused production, and non-OPEC producers, notably in the Americas, are also ramping up their output. Compounding the bearish outlook, the release of weaker Chinese economic data on Monday has heightened concerns about declining energy demand from the world's largest importer of crude.