Economy News – Baghdad
Oil prices experienced a decline during early Thursday trading, driven by optimism surrounding a potential peace agreement between Ukraine and Russia. This development could pave the way for an end to sanctions that have disrupted supply flows, alongside U.S. President Donald Trump’s announcement of plans to impose countervailing duties, which has heightened inflation concerns.
As of 0141 GMT, Brent crude futures fell 55 cents, or 0.73 percent, to $74.63 per barrel, while U.S. West Texas Intermediate crude futures dropped 52 cents, or 0.73 percent, to $70.85.
Both benchmarks declined by over two percent the previous day following Trump’s revelation that Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky expressed their desire for peace during separate conversations with him. Trump has directed senior U.S. officials to commence discussions aimed at ending the conflict in Ukraine.
Russia holds the position of the third-largest oil producer globally, and the sanctions imposed on its crude oil exports in response to its ongoing conflict in Ukraine—now approaching three years—have significantly contributed to the sustained high prices.
Analysts at ANS noted in a Thursday memorandum that the potential for peace talks has contributed to the decline in oil prices due to a sense of “optimism regarding the alleviation of risks threatening crude oil supplies.”
Furthermore, analysts have indicated that U.S. and European Union sanctions have resulted in decreased Russian oil production.
They stated, “Indicators signaling reduced supply have prompted oil prices to rise in recent weeks. Reports suggest that U.S. sanctions on Russian oil companies and vessels have exacerbated the situation.”
Trump’s threats to impose additional tariffs on U.S. trading partners stem from concerns regarding economic growth and its subsequent impact on oil demand.
The President has threatened to levy countervailing duties on any country that imposes tariffs on American imports, a move that raises fears about the escalation of a global trade war and poses a risk of further inflating prices within the United States.
The market sentiment has also been influenced by a rise in oil inventories in the United States, the world’s largest consumer of crude oil.
Data from the Energy Information Administration revealed that U.S. crude stockpiles increased more than anticipated last week, with crude inventories rising by 4.1 million barrels to a total of 427.9 million barrels for the week ending February 7. This figure exceeded analyst expectations, which had predicted an increase of 3 million barrels.
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