The price of US crude fell below $55 per barrel on Tuesday, hitting $54.98 before edging back to $55.19. The 2.87% drop in the day marks its lowest level since February 2021. The decline reflects expectations of a global supply surplus and a calmer geopolitical backdrop, notably regarding the conflict in Ukraine.
Since the start of the year, oil markets have been under heavy pressure from rising output by OPEC+ countries after years of voluntary curbs. At the same time, investors are factoring in the possibility of a peace deal in Ukraine, encouraged by President Donald Trump, who is pushing for a compromise between Kyiv and Moscow. A de-escalation would reduce the risk of disruptions to global energy supplies.
Russia's 2022 invasion of Ukraine heightened market tensions, due to Western sanctions targeting Russia's oil sector and Ukrainian attacks on its energy infrastructure. In this new context, US pump prices are following suit: a gallon of gasoline has fallen below $3, its lowest level in four years, according to AAA data.
