WASHINGTON (dpa-AFX) - Crude oil tumbled on Friday amid emerging indications of a Russia-Ukraine ceasefire and due in part to thin trading following the Christmas Day holiday.
Supply side concerns due to the intensifying U.S.-Venezuela conflict and the recent crisis in Nigeria limited the decrease in prices.
WTI Crude Oil for February delivery was last seen trading down by $1.41 (or 2.42%) at $56.94 per barrel.
In Europe, Russia has stepped up its aerial attacks on Ukraine since Christmas Eve.
For its part, Ukraine launched drone offensives targeting oil reserves at Temryuk port and a gas processing plant in Russia's Orenburg region.
The diplomacy route adopted by the U.S. to stop the Russia-Ukraine war has yet to show signals of a peaceful end.
After commenting that the negotiations between the U.S. envoys and Ukrainian high-level officials were smooth, Ukrainian President Volodymyr Zelenskyy stated that a new 20-point peace proposal is about 90% ready and added that he is set to meet U.S. President Donald Trump at Mar-A-Lago on December 28 to carry on further discussions.
Russia claimed that the European nations are blocking the peace talks but announced that the negotiations are making 'slow but steady' progress.
Though analysts are doubtful Russia would retreat on its 'territorial demands' in Ukraine, the announcement has triggered excess supply concerns due to the potential return of Russian oil to the global markets and weighed down on oil prices today.
Meanwhile, Trump has long been accusing Venezuelan President Nicolas Maduro of fostering illegal narco-trade that he says is causing an opioid crisis in the U.S.
Denying Trump's accusations, Maduro counter-claimed that Trump wants to seize the rich oil reserves of Venezuela and called for U.N. intervention.
Since September, the U.S. has launched dozens of strikes on vessels linked to Venezuela in the Caribbean Sea and Pacific Ocean, while the U.S. military has ramped up its presence around Venezuela.
Last week, Trump ordered a 'total naval blockade' of all sanctioned vessels entering or leaving Venezuela. The U.S. military has already seized two oil tankers.
On Monday, Trump announced that the U.S. would either keep the confiscated oil for its own strategic pile up or sell it on the market. Trump's remarks that the U.S. would probably force Maduro out of power heightened the tension.
On Tuesday, while the U.N. Security Council urged the U.S. to refrain from aggressive moves, China and Russia condemned these U.S. offensives.
Being a major Venezuelan oil importer, China condemned the U.S. strongly. Any intervention by China in support of Venezuela could exacerbate the crisis, according to experts.
Meanwhile, in a fresh development in West Africa, the U.S. carried out strikes against ISIS targets in Nigeria's Sokoto province in a joint operation with the nation's military. Nigeria has hinted at more such joint strikes to wipe out the ISIS militants.
In the U.S., expectations of an interest rate cut by the U.S. Federal Reserve have grown after Trump remarked that he expects the next Fed Chair to slash rates to as low as 1%. Trump stressed that he would expect the incumbent to never disagree with him.
Currently, the Fed has brought the rates down to the 3.50% to 3.75% range.
On the inventory front, Baker Hughes Company data reveals that crude oil rigs in the U.S. have increased to 409 as of December 23 from 406 in the previous week. For the same period, total rigs have increased to 545 in from 542.
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