Oil prices fall amid progress on Russia-Ukraine peace talks

Oil prices slumped on Tuesday morning, as signs of progress on Russia-Ukraine peace talks lifted expectations for a potential easing of sanctions on Moscow, allowing for greater supply back onto the market.

Brent crude (BZ=F) futures slid 1.2% to $59.82 per barrel at the time of writing, while West Texas Intermediate futures (CL=F) dropped 1.3% to $56.08 a barrel.

On Monday, US president Donald Trump said: “We had numerous conversations with president Putin of Russia, and I think we’re closer now than we have been ever.”

Trump’s comments come following talks in Berlin between US and Ukrainian negotiators, alongside European officials.

Read more: Markets dip as UK jobs data keeps interest rate cut in sight

Ukraine’s top peace negotiator, Rustem Umerov wrote in a post on social media platform X on Monday: “Over the past two days, Ukrainian-US negotiations have been constructive and productive, with real progress achieved.”

ING’s head of commodities strategy Warren Patterson and commodities strategist Ewa Manthey said: “Oil markets will be watching developments closely, given the significant supply risk from sanctions on Russia.

“While Russian seaborne oil exports have held up well since the imposition of sanctions on Rosneft and Lukoil, this oil is still struggling to find buyers,” they said. “The result is a growing volume of Russian oil at sea.”

Meanwhile, weak economic data from China has raised concerns about slowing demand from the world’s largest importer of oil, adding to concerns about an oversupply in the market.

Gold prices retreated on Tuesday after reaching a seven-week high, as investors eyed key economic data releases.

Gold futures (GC=F) fell 0.6% higher to $4,328.50 per ounce at the time of writing on Friday morning, while spot gold gained 0.5% at $4,303.12 an ounce.

US employment data for October and November are due to be released on Tuesday, after being delayed by the government shutdown.

Read more: UK unemployment rises and wage growth slows ahead of Bank of England interest rate decision

Chris Beauchamp, chief market analyst UK at investment and trading platform IG, said: “Today’s delayed payrolls report could be the catalyst markets need to extend the year-end rally. If the numbers show the US labour market is cooling sufficiently, it would confirm the Fed’s easing path remains on track. That’s exactly what investors want to hear as we head into 2026.”

The US consumer price index (CPI) inflation print is then slated for released on Thursday.

The pound rose 0.3% against the dollar (GBPUSD=X) on Tuesday morning, to trade at $1.3406, as weak UK jobs data added to bets that the Bank of England will cut interest rates on Thursday.

Data released by the Office for National Statistics on Tuesday showed that the rate of UK unemployment rose to 5.1% in August to October – its highest level in nearly five years. Meanwhile, annual growth in average earnings, excluding bonuses, was 4.6% in August to October, which was down from 4.7% for the previous three months.

In addition, the number of payrolled employees continued to fall, while job vacancies declined slightly.

Richard Hunter, head of markets at Interactive Investor, said that the rise in unemployment “should be the final piece of the jigsaw in ensuring that the Bank of England cuts interest rates on Thursday”.

“The reluctance of businesses to invest, hire and plan for the immediate future was already evident leading up to the budget, let alone in the aftermath, with a moribund economy now patently in need of some immediate stimulus,” he said.

The pound also rose against the euro (GBPEUR=X) on Tuesday morning, advancing 0.2% to trade at €1.1399 at the time of writing.

More broadly, the FTSE 100 (^FTSE) hovered around the flatline in early European trading, at 9,748 points. For more details on market movements check our live coverage here.

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