Crude oil prices fell, halting a two-day rally driven by escalating geopolitical tensions. West Texas Intermediate (WTI, Financial) crude futures dropped 0.7%, settling below $69 per barrel. The earlier rise in oil prices was triggered by Ukraine's armed forces launching British-made cruise missiles at Russian military targets, coupled with Russia's heightened nuclear retaliation threats.
The market's upward momentum was curtailed following the U.S. Energy Information Administration's (EIA) report, which revealed an increase in U.S. crude oil inventories by 545,000 barrels and gasoline inventories by 2.05 million barrels. Despite these bearish inventory figures, geopolitical developments continue to draw attention.
Russia has expressed readiness to discuss a potential ceasefire with Ukraine with the incoming U.S. President, Trump, sparking speculation about the possible resolution of the Russia-Ukraine conflict. According to analysts, the importance of the Russia-Ukraine conflict to investment markets is once again evident, as the oil market faces a new tug-of-war between geopolitical factors and supply dynamics.
Additionally, the approaching expiration of the December WTI contract contributed to market volatility. The WTI January crude futures fell 0.7%, settling at $68.75 per barrel. The December crude futures, which expired, settled at $68.87 per barrel, while Brent January crude futures also declined by 0.7%, closing at $72.81 per barrel.
