WTI dips below $56.50 on potential Russia-Ukraine deal

West Texas Intermediate is trading around $56.35 during the Asian trading hours on Tuesday. The US crude oil benchmark price remains under selling pressure amid renewed signs of optimism surrounding a deal to end the war in Ukraine.

Traders also brace for the release of the American Petroleum Institute (API) crude oil stockpiles report later on Tuesday.

US officials said on Monday that an agreement with Ukrainian President Volodymyr Zelenskyy to end the war with Russia was nearly complete, although territorial disputes remain unresolved and a strong security guarantee from the US and European countries remains a sticking point.

A possible peace deal could eventually lift restrictions and increase Russian oil supply, which could drag the WTI price lower.

On the other hand, the downside for the black gold might be limited amid the risk of US military action in Venezuela after the Trump Administration detained a supertanker last week.

Reuters reported that Venezuela’s oil shipments have fallen substantially since the US seized a tanker last week and imposed fresh sanctions on shipping companies and vessels doing business with Caracas.

“The grind lower in oil prices and the achieving of month-to-date lows across the major futures complex last week might have seen more negative pricing if it were not for the upping of the ante by the United States with regard to Venezuela,” said John Evans, an analyst with PVM.

(Source: OANDA)