By Florence Tan and Mohi Narayan
NEW DELHI, Oct 12 (Reuters) – Oil prices fell on Monday on expectations of an increase in Russian supplies after U.S. President Donald Trump said Ukraine and Russia had agreed to end attacks on each other’s energy facilities, following a diesel supply deal with Moscow.
Brent crude futures fell 11 cents, or 0.11 percent, to $104.61 a barrel by 0627 GMT, while U.S. West Texas Intermediate crude was at $91.36 a barrel, down 49 cents, or 0.53 percent. Both benchmarks were down more than 1% earlier in the session.
ICE diesel futures fell 3% to $1,436 per metric ton after President Trump said Friday that Russia would immediately supply more than 300,000 metric tons (2.25 million barrels) of diesel to the U.S. and global markets.
Russia would provide another 500,000 tons in November and another 1 million tons “immediately thereafter,” Trump added. Daily diesel consumption worldwide is expected to reach nearly 29 million barrels, according to the International Energy Agency.
Trump also unexpectedly announced on Sunday that Ukraine and Russia had agreed to an energy ceasefire, but Ukrainian leader Volodymyr Zelenskiy said he was still waiting to see the details of the energy ceasefire while Russia made no comment.
Those announcements eased some of the immediate supply pressure, said KCM Trade chief analyst Tim Waterer.
“Questions remain about the validity and longevity of such a ceasefire, and without clearer evidence that it will actually hold, the scale of the withdrawal will likely remain limited,” he added.
IEA Executive Director Fatih Birol said on Sunday that all members should assess whether additional diesel releases are needed and that countries that have not yet fully delivered promised volumes should accelerate their remaining releases by prioritizing diesel.
CRUSH SUPPORTED BY MIDDLE EAST CONFLICT
However, the conflict in the Middle East continued to support Brent crude above $100 per barrel.
The Houthis claimed responsibility for a Saturday strike on Riyadh’s international airport that killed 13 people and injured more than 300, while Saudi authorities reported people were injured in a fresh attack on the airport on Sunday.
US President Donald Trump said on Saturday that the United States was considering joining Saudi strikes against the Houthis in the conflict, an outgrowth of the broader war with Iran that the United States and Israel launched in February.
Additionally, new attacks on oil tankers sailing through the Strait of Hormuz have been reported so far this month, threatening to dampen the recovery in Middle East crude exports seen in September.
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