Oil prices rose by 2%. The market saw no progress in the negotiations between Trump and Zelensky.
Prices are also affected by tensions surrounding Venezuela and China's willingness to purchase more raw materials.
Oil prices rose at the beginning of the week: investors saw little progress in the peace process in Ukraine after talks between Donald Trump and Vladimir Zelensky. Brent and WTI are also affected by geopolitical tensions in the Middle East, expectations of increased demand from China, and US actions regarding Venezuela. Despite this, December could be the fifth consecutive month of price declines for commodities due to fears of a global supply glut.
Details
Brent crude rose more than 2% in trading on Monday, December 29, approaching $62 per barrel. At the same time, West Texas Intermediate (WTI) futures gained 2.2%, approaching $58.
Investors primarily assessed the results of negotiations between US President Donald Trump and Ukrainian President Vladimir Zelensky on a possible agreement to end the conflict with Russia, Reuters reports. At the same time, as Bloomberg notes, oil is still heading for its fifth consecutive monthly decline in December, which could be the longest period of decline in more than two years. The market is under pressure from concerns about a global supply glut amid rising production by the OPEC+ cartel, led by Saudi Arabia and Russia, as well as producers outside the alliance.
What Trump and Zelensky reported
Following talks at Trump's residence in Florida, the US president said that he and Zelensky were "very close, perhaps very close" to an agreement to end the conflict in Ukraine, Reuters reports. But the key unresolved issue remains Donbass, which Russia claims, the agency notes. According to Trump, it will only become clear "in a few weeks" whether the efforts to achieve peace will be successful. Zelensky, in turn, said that the framework of the peace agreement is "90% agreed" and the security guarantees between the US and Ukraine are 100% agreed, Bloomberg writes.
Trump added that he is ready to address the Ukrainian parliament if it helps to consolidate the agreements reached, and did not rule out a trilateral meeting with Zelensky and Vladimir Putin. In addition, he intends to organize a meeting with the Ukrainian president and European leaders in January.
The lack of progress in negotiations on Ukraine has provided some support for oil prices, said Gao Mingyu, senior energy market analyst at China Futures, as quoted by Bloomberg. "It seems that there are still many mutual steps and setbacks ahead," she added.
What else is in the market spotlight?
The rise in oil prices is also linked to continued high geopolitical tensions, Reuters writes. Over the weekend, Russia and Ukraine continued to strike each other's energy infrastructure, Haitong Futures analyst Yang An noted in the agency's report.
"The situation in the Middle East also remains unstable: Saudi Arabia has launched air strikes on Yemen... This is precisely what may be fueling market fears about possible supply disruptions," Jan added.
In addition, oil prices rose on expectations of increased demand from China, Bloomberg reports. Beijing has promised to expand its fiscal spending base in 2026, signaling the authorities' intention to maintain state support for economic growth, the agency notes.
According to IG analyst Tony Sycamore, WTI is likely to trade in the range of $55–60 per barrel, Reuters reports. The market also remains focused on US actions to control Venezuelan oil supplies and the possible consequences of US military strikes on ISIS (a banned terrorist organization) targets in Nigeria, where about 1.5 million barrels of oil are produced per day.
This article was AI-translated and verified by a human editor
