Oil Falls on Ukraine Peace Plan as Russia Sanctions Set to Start

The US is calling for enhanced tracking of semiconductor chips amid allegations of smuggling AI chips to China. This development highlights concerns over national security and the potential transfer of sensitive technology to foreign adversaries. The situation underscores the ongoing tensions between the US and China regarding technology and trade.

The Congressional Budget Office (CBO) has revised its estimate, stating that tariffs imposed by former President Trump will reduce U.S. deficits by $1 trillion less than previously projected. This adjustment reflects the ongoing impact of trade policies on the national economy.

The US dollar strengthened following the release of robust employment data, which has led to diminished expectations for a Federal Reserve interest rate cut. The positive jobs report indicates a resilient labor market, prompting investors to reassess their outlook on monetary policy.

Oil prices have declined as the U.S. intensifies efforts to negotiate a peace deal between Russia and Ukraine. This push for peace has led to a reduction in the risk premium associated with oil prices, reflecting market uncertainty regarding future supply and demand dynamics. The geopolitical tensions continue to weigh heavily on the oil market, contributing to the negative sentiment.

The US economy added 119,000 jobs in September, according to a report from Investing.com. Despite this solid job growth, the unemployment rate rose to 4.4%, marking the highest level since 2021. This report was delayed due to a federal government shutdown, which has raised concerns about the overall stability of the labor market.

Oil futures experienced a decline after initially gaining ground, as the U.S. proposed a plan to revive peace negotiations between Russia and Ukraine. This development led to a reduction in the risk premium associated with oil prices, occurring just a day before new U.S. sanctions against Russia are set to take effect.

US midstream companies are rapidly expanding their natural gas liquids (NGL) export capacity due to increasing global demand. However, analysts caution that a potential processing squeeze could hinder operations before shipments reach their destinations.

Russia has secured a 15-year extension for its joint venture in Venezuela's oilfields, reinforcing its presence in the region's energy sector. This agreement is part of ongoing efforts to enhance bilateral cooperation between the two nations, particularly in the oil industry, which is crucial for Venezuela's economy.