Brent crude hits 6-month low amid oversupply concerns

Oil prices fell to their lowest levels since May on Tuesday, with Brent crude dropping below $60 per barrel on growing hopes of a peace deal between Russia and Ukraine that could transform the global energy market.

Brent crude fell to $59.70 per barrel, its lowest price since May 5, as traders await the close of the session to see if the price will stabilize below $60, a level Brent has not closed below since the outbreak of the COVID-19 pandemic.

Growing pressure on oil prices

WTI crude oil closed yesterday's session at $56.82 per barrel, its lowest level since February 2021, reflecting the amount of pressure currently facing the oil market.

These pressures increased after the statements of US President Donald Trump, who indicated on Monday that reaching an agreement to end the war in Ukraine is closer than ever, explaining that Washington agreed to provide security guarantees to Ukraine despite continuing differences over some regional issues.

Prospects for Russian oil to return to the market

Any potential agreement between Moscow and Kiev could open the door to the lifting of US sanctions on Russian oil, which could lead to additional crude flowing into global markets, adding to the expected oversupply this year and next.

The oil market is expected to face a supply glut, especially as OPEC+ countries resume suspended production, along with the continued increase in oil production from outside the organization, especially from the United States and the Americas.

Weak Chinese demand adds to the pessimism

Weak economic data from China on Monday added to the negative outlook for oil prices, raising investor concerns about slowing energy demand from the world's largest importer of crude oil.

Concerns over supply disruptions, which were triggered by escalating tensions between the United States and Venezuela, eased as fears of oversupply and weak global demand overshadowed the oil market outlook.