Brent Crude fell below $60 per barrel this morning, marking the lowest level in more than seven months, while WTI closed at its weakest since February 2021. Optimism over a potential Ukraine ceasefire and easing US sanctions on Russian Oil has weighed on prices, though analysts caution that supply expansion from Russia is limited, suggesting the recent decline may be overstated, Commerzbank's commodity analyst Carsten Fritsch notes.

Oil selling pressure driven by expectations of easing US sanctions on Russia

"The price of Brent Crude Oil fell below $60 per barrel this morning for the first time in more than seven months. The WTI price even closed at its lowest level since February 2021 yesterday."

"Selling pressure is being generated by new hopes for an end to the war in Ukraine in the near future and the accompanying easing or lifting of US sanctions against the Russian Oil sector. Russian Oil stored in tankers would then find buyers more easily and the mutual attacks on energy infrastructure would cease."

"However, we have already emphasized several times that a significant expansion of Oil supplies from Russia is unlikely because Russia is bound by OPEC+ production targets and is already producing close to its own capacity limits. Therefore, the current price weakness appears to be excessive.