By Milad Azar, Market Analyst at XTB MENA

Crude oil was trading in negative territory today, after last week’s slide to four-week lows. The market could remain under pressure as traders consider the developments around peace efforts in Eastern Europe. A potential US-brokered framework has led traders to unwind part of the war-risk premium, on the assumption that a future deal could gradually normalise Russian exports and add to the oversupply risk. In this regard, the latest IEA outlook highlights a structurally bearish backdrop, projecting global supply growth that outpaces demand through 2026 and indicating an oversupply of more than 4 million barrels per day if OPEC+ does not adjust its output.

However, traders could continue to monitor the impact of the latest US sanctions on Rosneft and Lukoil on Chinese and Indian crude imports. US-Venezuela tensions could also remain a source of risks and could impact the market to a limited extent.

Macro conditions could contribute to some headwinds. Uncertainty over the Fed’s rate-cut timing could dampen risk appetite and cap potential gains, although interest rate cut expectations have returned to the upside. In the very near term, all eyes are on the peace proposal in Eastern Europe; any surprise could inject fresh volatility into crude.