WTI tumbles to near $71.00 as Trump says Putin agrees to start negotiations to end war in Ukraine
WTI attracts some sellers to around $71.10 in Thursday’s early Asian session.
Trump called Putin and Zelenskiy to discuss ending the war in Ukraine.
US crude oil stockpiles climbed by 4.07 million barrels last week, according to the EIA.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $71.10 during the early Asian session on Thursday. The WTI price falls as US President Donald Trump called Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy to discuss ending the war in Ukraine.
Trump discussed the war in Ukraine in phone calls with Putin and Zelenskiy. Trump claimed he and Putin had agreed to have their respective teams start negotiations immediately, and they will begin by calling Zelenskiy to inform him of the conversation. "Trump doing peace talks, I think that has taken some of the risk premium out of oil prices right now," noted Phil Flynn, senior analyst with Price Futures Group.
US crude inventories continued to rise last week, which might cap the upside for the WTI. The US Energy Information Administration (EIA) weekly report showed crude oil stockpiles in the United States for the week ending February 7 climbed by 4.07 million barrels, compared to a rise of 8.664 million barrels in the previous week. The market consensus estimated that stocks would increase by 2.8 million barrels.
Hawkish remarks from Fed Chair Jerome Powell contribute to the WTI’s downside. Federal Reserve (Fed) Chair Jerome Powell said the recent inflation data showed that while the central bank has made substantial progress toward taming inflation, there is still more work to do. Powell said on Tuesday that the Fed is not rushing to cut interest rates further due to strength in the job market and solid economic growth.
"Oil prices resumed their downtrend as the macro environment weighed on sentiment, with Jerome Powell indicating that the U.S. Fed was not in a rush to lower rates," said Harry Tchilinguirian, head of research at Onyx Capital Group.
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