Renewed optimism over a Russia-Ukraine ceasefire weighed on the Oil market yesterday. ICE Brent settled a little more than 0.9% lower, leaving it at $60.56/bbl -- the lowest close since May. President Trump has said that an agreement to end the war in Ukraine is closer than ever, after talks in Berlin. Clearly, territory remains a big sticking point, ING's commodity experts Ewa Manthey and Warren Patterson note.

Russian Oil faces buyer shortfall despite exports holding up

"Oil markets will be watching developments closely, given the significant supply risk from sanctions on Russia. While Russian seaborne Oil exports have held up well since the imposition of sanctions on Rosneft and LukOil, this Oil is still struggling to find buyers. The result is a growing volume of Russian Oil at sea. India, a key buyer of Russian Oil since the Russia/Ukraine war began, will reportedly see imports of Russian Crude fall to around 800k b/d this month, down from around 1.9m b/d in November."

"The continued weakness in the refined products market may be adding to the broader pressure on Oil markets over the last week or so. Refinery margins surged in November amid concerns over the impact of sanctions on refined product flows and persistent Ukrainian drone attacks on Russian refinery assets. These concerns coincide with some refinery outages and the maintenance season."

"This has been evident in the middle distillate market, with the ICE gasOil crack trading up towards $38/bbl in November on the back of heavy speculative buying. However, speculators have been heavily selling the gasOil market since late November. Ths has seen the crack fall back towards $23/bbl. As of last Tuesday, speculators held a net long of 58,578 lots in ICE gasOil, down from a peak of 102,195 lots as of 25 November."

(This story was corrected on December 16 at 09:28 GMT to say that the report is from ING, not Commerzbank, in the headline.)