Crude oil prices fell on Tuesday amid turbulent market movements, as traders assessed the trajectory of the Russia-Ukraine conflict during a critical day for peace negotiations.
WTI crude fluctuated within a range of approximately $1.40 before settling 1.2% lower at just above $58 per barrel.
According to Interfax, Russian President Vladimir Putin issued threats of retaliatory measures against vessels from countries aiding Ukraine in the conflict. However, Putin also emphasized the necessity of Russia's economic growth, expressing dissatisfaction with imbalances in certain industries. These remarks came as Russian oil producers face mounting challenges amid declining crude prices, sanctions, and a strengthening currency.
U.S. envoy Kurt Volker arrived in Moscow to meet with Putin, who claimed that Russian forces had seized a key Ukrainian city amid ongoing peace talks. Over the past week, attacks on four Russian oil tankers signaled a sharp escalation in assaults targeting Russian oil shipments.
Geopolitical risks also supported oil prices, including the possibility of U.S. military action in Venezuela. President Donald Trump hinted that the Pentagon would soon launch ground operations against drug cartels in Venezuela and other regions, heightening concerns.
However, Rebecca Babin, senior energy trader at CIBC Private Wealth Group, noted that broad expectations of lower oil prices still dominate the market. "Liquidity is drying up rapidly, and given the current pessimistic sentiment, this increases the risk of a sharp decline in crude prices. The lack of confidence in bargain-hunting has created a market vacuum, leaving prices highly vulnerable to sell-offs."
January WTI crude futures fell 1.2% to settle at $58.64 per barrel. February Brent crude declined 1.1% to close at $62.45 per barrel.
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