Oil Prices Drop on Ukraine Peace Deal Reports


   
   VIENNA (DTN) -- Crude futures tumbled Tuesday (11/25) morning on media 
reports that Ukraine supports the essence of a framework for peace with Russia 
drawn up by the United States.

   The reports appeared to accelerate the odds of the near four-year 
Ukraine-Russia war ending soon and for sanctioned Russian oil to officially 
re-enter an oversupplied global market.

   The NYMEX WTI contract for January delivery fell $1.12 bbl to $57.72 bbl, 
and ICE Brent for January delivery dropped $1.22 to $62.15 bbl.

   December RBOB gasoline futures retreated $0.0243 to $1.8723 gallon, and 
front-month ULSD futures tumbled $0.0457 to $2.3604 gallon.

   The U.S. Dollar Index softened by 0.127 points to 99.945 against a basket of 
foreign currencies.

   Monday's media reports on the Ukraine-Russia peace process contained varying 
language.

   ABC News on Tuesday reported that a U.S. official said Ukraine had "agreed 
to a peace deal".  The report contradicted earlier statements from Ukrainian 
officials who in the past week had largely rejected the terms of the U.S. 
proposal.

   A Ukrainian official said in another report that the country supports the 
essence of the framework in the U.S. peace initiative unveiled in Geneva last 
week. The most sensitive issues of framework will be discussed between 
Ukrainian President Volodymyr Zelenskyy and U.S. President Donald Trump, the 
official said.

   It was also unclear whether Russia will accept the outcome of U.S. and 
Ukrainian discussions on the matter.

   Oil futures extended losses from last week amid concerns about the repealing 
of sanctions on Russia should the peace deal go ahead.

   While the end of Ukrainian strikes on Russian downstream infrastructure 
would take pressure of a tight global middle distillate market, it would be a 
different story with crude market which was already seen oversupplied as of the 
third quarter. OPEC projected a 500,000-bpd crude surplus for the quarter, 
reversing the 400,000-bpd deficit it forecasted in October. The International 
Energy Agency has, meanwhile, forecasted a 4.09 million bpd global oversupply 
for 2026, versus a prior 3.97 million bpd.

   Separately, the Energy Information Administration estimated that U.S. crude 
production hit a record-high 13.76 million bpd in the third quarter.




(c) Copyright 2025 DTN, LLC. All rights reserved.