Crude prices retreat after recent volatility

Global oil prices slipped at the start of the week as traders balanced fresh hopes for progress in Russia-Ukraine peace efforts with worries over future supply. Benchmarks for Brent and U.S. crude inched lower in early trading after a sharp rally and subsequent pullback last week. Investors are trying to judge whether tentative diplomatic moves could eventually lead to fewer disruptions in Russian exports, which have helped keep markets tight. At the same time, questions remain over U.S. shale output, OPEC+ production discipline and demand from large Asian buyers heading into winter. The result is a market that reacts quickly to small shifts in sentiment, with daily price swings becoming the norm rather than the exception.

Currency moves and central bank expectations are adding another layer of uncertainty. A stronger dollar makes crude more expensive for many importers, while shifting bets on U.S. interest-rate cuts influence how much speculative money flows into commodities. Analysts note that hedge funds recently reduced some bullish positions after signs that demand growth could ease if global manufacturing and transport activity stay soft. Yet fuel inventories in key consuming regions remain relatively low by historical standards, leaving little buffer if any new disruption hits major producers or shipping routes. Refiners, airlines and logistics firms are closely watching the negotiations around Ukraine as well as broader geopolitical tensions in the Middle East and Red Sea corridors. Any hint of a breakthrough or breakdown can move prices in hours, underscoring how energy security and geopolitics remain tightly bound even when peace talks are on the table.