US oil prices slid to their lowest levels since 2021 on Tuesday as optimism over a possible Russia–Ukraine peace deal, rising global supply and soft demand indicators weighed on crude markets, according to the Financial Express.
During mid-morning trade in Europe, Brent crude fell 1.8 per cent to $59.46 a barrel, while West Texas Intermediate (WTI) dropped 1.9 per cent to $55.60 a barrel. Both benchmarks had fallen sharply earlier in the session, with Brent briefly slipping below $60 for the first time since May and WTI declining more than 3 per cent at its intraday low.
Market sentiment has been affected by renewed momentum in talks to end the Russia–Ukraine conflict. Expectations that sanctions on Russian oil producers could eventually be eased have reduced the geopolitical risk premium at a time when supply is already ample. Analysts cited by the Financial Express said Russian seaborne exports have remained resilient, but a growing volume of crude is struggling to find buyers, adding to oversupply concerns.
At the same time, oil inventories are building rapidly. Data from the International Energy Agency shows global crude stocks climbed to a four-year high in October, including oil held on tankers or in transit. Prices are now down more than 20 per cent this year, reflecting expectations of a widening surplus. The agency has warned that next year’s excess supply could be the largest on record, even after OPEC+ delayed planned output increases into early 2026.
Bearish signals are also emerging across physical and futures markets. Middle Eastern crude has slipped into contango, where near-term prices trade below later deliveries, while similar patterns have appeared in parts of the US market. Margins for refined fuels such as petrol and diesel have weakened, further pressuring crude prices.
Demand-side concerns have added to the decline. Recent economic data from China pointed to slowing momentum, raising questions about fuel consumption in the world’s second-largest oil consumer. In the United States, softer job growth has also signalled potential weakness in energy demand.
While falling oil prices have helped ease inflation pressures and pushed US petrol prices to their lowest levels since 2021, the slide poses growing challenges for oil-producing nations reliant on higher crude revenues.
