Oil Prices Slip as Ukraine Peace Talks Progress and China's Economy Stalls

Oil prices experienced downward pressure in early Asian trading on Tuesday, influenced by both encouraging developments in Russia-Ukraine peace negotiations and disappointing economic figures released from China. These factors combined to dampen market sentiment and push crude oil benchmarks lower.

West Texas Intermediate (WTI) crude oil was trading near $56.49 per barrel, reflecting a decrease of approximately 0.6%. Brent crude traded at about $60.20 a barrel, also down by roughly 0.6%. These prices continued the downward trend from the previous trading session.

Growing hopes for a peaceful resolution to the Russia-Ukraine conflict contributed to the price decline. Discussions in Berlin included a proposal from U.S. officials for NATO-style security guarantees for Ukraine. Former President Trump indicated that negotiators are making significant progress. A successful resolution could lead to the easing of sanctions against Russia, potentially increasing Russian oil supply.

Adding to the bearish outlook, recent economic data from China, the world's largest importer of crude oil, raised concerns about a potential oversupply. Official data released on Monday revealed that factory output in China had slowed to a 15-month low, while retail sales grew at their slowest rate in almost three years. These figures intensified concerns regarding the strength of global oil demand in 2026.

Weak demand signals from China, along with ongoing economic challenges in other parts of Asia, are amplifying macroeconomic pressures that have kept crude oil prices subdued for several months.

Currently, oil traders are hesitant to drive prices upward until there are definitive signs of increased demand or a significant disruption in supply.