Oil prices fell on Wednesday after Russia agreed to US President Donald Trump's proposal that Moscow and Kyiv temporarily stop attacking each other's energy infrastructure, which could allow more Russian oil to enter the global market.
Brent crude was down 23 cents, or 0.3%, at $70.33 a barrel by 0730 GMT. U.S. West Texas Intermediate (WTI) crude was down 25 cents, or 0.4%, at $66.65.
Russian President Vladimir Putin on Tuesday agreed to stop attacking Ukrainian energy facilities but stopped short of a full 30-day truce that Trump had hoped for.
"The agreement marks a positive step towards a final resolution, with the halt to attacks on Ukrainian energy facilities reducing the risk of further oil supply disruptions and keeping oil prices under pressure," said Yeap Jun Rong, market strategist at IG.
Russia is one of the world's top oil suppliers, but its output has declined since the start of the war, leading to sanctions on Russian energy.
A potential ceasefire could lead to sanctions relief, which could boost oil supplies and lower prices, analysts said.
U.S. tariffs on Canada, Mexico and China have raised concerns about a recession, which has also weighed on oil prices because they would reduce demand for crude.
The oil market remains focused on falling prices despite rising tensions in the Middle East, Goldman Sachs analysts said in a note on Wednesday.
"Rising tariffs and high spare capacity distort the medium-term risks to our outlook to the downside," the analysts said.
Trump vowed to continue his country's offensive against Yemen's Houthis and said he would hold Iran accountable for any attacks by the group that have disrupted shipping in the Red Sea.
Meanwhile, Israeli airstrikes on Gaza killed at least 200 people, Palestinian health authorities said, ending a weeks-long ceasefire and raising the risk of oil supplies being threatened from the wider region.
Meanwhile, U.S. crude stockpiles data painted a mixed picture, with crude stocks rising while fuel inventories fell.
Crude stocks rose by 4.59 million barrels in the week to March 14, market sources said, citing figures from the American Petroleum Institute on Tuesday. Gasoline inventories fell by 1.71 million barrels and distillate stocks fell by 2.15 million barrels, they said. (Newsmaker23)
Source: Reuters
