Oil prices fall as Russia-Ukraine peace talks gain momentum

Oil prices edged lower on Monday, continuing a slide from last week as hopes for a Russia-Ukraine peace deal and a stronger US dollar weighed on markets.

Brent crude dropped 14 cents, or 0.22 percent, to $62.42 per barrel, while West Texas Intermediate slipped 15 cents, or 0.26 percent, to $57.91 a barrel. Both benchmarks fell roughly 3 percent last week, marking their lowest settlements since October 21.

Analysts said optimism over a potential peace agreement between Russia and Ukraine is driving much of the recent decline. US President Donald Trump has been pushing for a deal, which could lift sanctions on Moscow and release previously restricted oil onto the global market.

“The market is reacting to the prospect of a rapid resolution, which could unlock substantial Russian supply,” said IG analyst Tony Sycamore. He added that this outlook outweighs short-term disruptions caused by new US sanctions on Russian energy giants Rosneft and Lukoil. These measures, effective Friday, have left nearly 48 million barrels of Russian crude stranded at sea.

On Sunday, the US and Ukraine reported progress in discussions over a peace plan that would require Ukraine to cede some territory and scale back its NATO ambitions. While Trump has set a deadline for Thursday, European leaders are urging more careful negotiation to secure a stronger deal.

Russia is the world’s second-largest oil producer after the US, and any rollback of sanctions could flood the market with additional crude, adding pressure on prices.

Investors are also watching US monetary policy closely. Uncertainty over interest rate cuts has kept some buyers cautious, though the prospect of a rate reduction next month rose after New York Federal Reserve President John Williams suggested a cut could come “in the near term.”