Oil price slump as hope for Ukraine ceasefire emerges – but more rises ‘certain’

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Russian and Ukrainian officials gave their most positive assessment of peace talks yet on Sunday with some delegates insisting a draft agreement could be ready in days. Thomas Hayes, chairman at Great Hill Capital in New York, said that the fact that neither side in the conflict could claim any sort of victory meant a negotiated settlement was likely.

He said: “Everything seems to be heading towards an acute point where we should have some headway.

“The fact is neither side has a complete edge and as a result talks are the most sensible outcome, with some type of resolution.”

Oil prices have risen rapidly since the start of the conflict last month as concerns about supply issues caused concern among investors.

However, a peaceful resolution to the conflict or even a temporary ceasefire would likely calm investor’s nerves.

The rise in oil prices has been exacerbated by limited levels of production and supply in oil producing nations.

Another key factor pushing prices up is the increase in demand following the easing of coronavirus restrictions in many parts of the world.

While much of the world was in lockdown in 2020 and 2021 a degree of normal economic activity has resumed but supply has not yet reached demand.

Brent futures fell 5.1 percent to $106.90 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 5.8 percent to settle at $103.01. 

This compares to a surge to up $139 a barrel last week.

Speaking to Sky News, RAC fuel spokesman Simon Williams said that the average petrol price was currently around £1.65 a litre but that the market seemed to be stabilising.

He said: “While there will almost certainly be more rises this week, drivers should soon get some respite from pump prices jumping by several pence a litre every day as oil and wholesale prices appear to have settled.

“The price hikes seen over the weekend are still a result of the oil price rise which began at the start of the month and peaked early last week. 

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“As the oil price has now fallen back, we should hopefully reach the peak and start to see prices going the other way to reflect the big drop in wholesale costs seen at the end of last week, subject to no further spikes in the barrel price this week.”

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