Oil prices fell below $60 a barrel on Tuesday, hitting their lowest level since May this year, as prospects for a potential peace deal between Russia and Ukraine appeared to strengthen and expectations of a possible easing of sanctions increased.
Brent crude futures settled down 81 cents, or about 1.3%, at $59.75 a barrel, while US West Texas Intermediate (WTI) crude was trading 84 cents lower, or roughly 1.5%, at $55.98 a barrel.
According to Rystad Energy analyst Janiv Shah, Brent slipped below $60 a barrel for the first time in several months this morning as the market assessed the likelihood of a peace agreement, which could allow more Russian production to return to the market and raise concerns about increased supply.
The United States offered NATO-style security guarantees for Kyiv, while European negotiators reported progress on Monday toward ending the war with Russia, raising hopes that the conflict may be nearing its end.
Russia, meanwhile, has said it will not agree to any territorial compromise in negotiations to end the Ukraine war, state news agency TASS reported, citing Deputy Foreign Minister Sergei Ryabkov.
PVM Oil Associates analyst John Evans said that prolonged negotiations would continue to weigh on prices, pushing Brent to its lowest levels of the year, though it is unlikely to fall below $55 a barrel.
Meanwhile, Barclays analysts expect Brent to average $65 a barrel in 2026, slightly ahead of the curve, taking into account an existing supply surplus of 1.9 million barrels per day in the market.
