WASHINGTON (dpa-AFX) - Crude oil surged on Monday, supported by a rally on Wall Street a indicating positive economic outlook and more demand growth, spurred by expectations of a rate cut by the U.S. Federal Reserve. The jump by oil prices came despite a U.S. peace proposal to end the Russia-Ukraine war adding downward pressure.
WTI Crude Oil for January delivery was last seen trading up by $0.73 (or 1.26%) at $58.79 per barrel.
Last Friday, John Williams, President of the Federal Reserve Bank of New York, indicated he expects the Fed to lower interest rates due to ongoing labor market weakness.
Today, the Federal Reserve Governor Christopher Waller said he is also in favor of an rate cut in December due to concerns about the labor market.
The renewed optimism about rate cuts boosted major U.S. indices, which signaled confidence in the economic outlook and thereby fresh energy demand, resulting in upward movement of crude oil prices.
The Russia-Ukraine war, which began in 2022 has crossed day number 1,360, with each side attacking the other's energy and oil installations and infrastructure, crippling oil flow into the markets.
Backed by the initial success of the Gaza Peace Plan recommended by U.S. President Donald Trump, last week the Trump administration came up with a 28-point peace proposal for Russia and Ukraine.
The tenets of the agreement were highly criticized of being favorable to Russia as it compelled Ukraine to give away territories captured by Russia.
Ukrainian President Volodymyr Zelenskyy had asserted that he was amenable to any peace plan only if it does not violate Ukraine's national interests.
Following this, the U.S. and Ukraine held negotiations last week in Geneva, Switzerland.
Yesterday, both the nations jointly announced that they are closing in on a 'revised and updated peace framework' to end the four-plus-year-old war. However, neither country shared any details of the content of the plans.
Negotiations are still going on today to finalize a draft proposal soon.
Hinting at the developments, Trump said that 'something good just may be happening.'
These advances in peace talks brought cheer to stock markets with oil prices feeling downward pressure.
The U.S. has imposed sanctions on Russian oil exports, targeting two oil majors - Rosneft and Lukoil.
Trump's 'penalty tariff' threats to nations that purchased oil from Russia is starting to show its effect as China, India, and Turkey (three major purchasers) start moving away from Russia for their oil needs.
An end to the Russia-Ukraine war could result in the lifting of sanctions and open up the free flow of oil from both nations to the market.
In recent days, the dollar index consolidated even as investors keep assessing divergent remarks from several U.S. Federal Reserve officials on additional rate cuts. Strength in U.S. dollar is acting against oil prices.
The broader bearish trend prevailing due to concerns of weaker demand growth along with concerns due to OPEC+ cartel's goals to rise production along with the gains in U.S. dollar piled up pressure on the oil prices.
Copyright(c) 2025 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2025 AFX News