A modest decline in oil prices on Tuesday has been driven by renewed diplomatic activity over the Russia-Ukraine conflict and growing concerns about demand in the world's largest energy consumers, the US and China.
International benchmark Brent crude fell by around 0.4%, trading at $64.72 per barrel at 10.25 a.m. local time (0725 GMT), down from $65.01 at the previous session's close.
Similarly, US benchmark West Texas Intermediate (WTI) declined by about 0.4%, settling at $61.81 per barrel, compared to $62.08 in the prior session
US President Donald Trump said on Truth Social that he had a "very good" two-hour phone call with Russian President Vladimir Putin. Trump claimed that "Russia and Ukraine will immediately start negotiations toward a Ceasefire and, more importantly, an END to the War."
Speaking to reporters in Sochi, President Putin said Moscow was prepared to work on a memorandum that would outline a number of positions, including the principles of a settlement and a potential temporary ceasefire, if agreement could be reached with Ukraine on the terms of a peace deal.
On the demand side, economic uncertainty in both the US and China continues to weigh on the markets.
Analysts say while diplomatic signals are encouraging, weak demand forecasts from the US and China remain the dominant force dragging prices lower.
Ratings agency Moody's downgraded the US credit rating from "Aaa" to "Aa1" after markets closed last week, citing fiscal concerns.
Meanwhile, official data from China's National Bureau of Statistics showed a slowdown in industrial output and retail sales.
Industrial production rose by 6.1% in April compared to a year earlier, down from a 7.7% increase in March. Retail sales, considered a key indicator of consumer demand, rose 5.1% in April, following a 5.9% rise in the previous month.
Additionally, ongoing nuclear negotiations between the US and Iran have also influenced market sentiment.
While talks continue, pessimism surrounding the likelihood of a deal has helped ease concerns over a potential supply glut, limiting further price declines.
Iranian Deputy Foreign Minister Majid Takht Ravanchi told Iran's judiciary-affiliated Mizan News Agency that US insistence on halting Iran's uranium enrichment could derail the talks.
Earlier, Trump's special envoy Steve Witkoff told ABC News that Washington could not permit Iran to enrich uranium "even by one percent."
Iranian Foreign Minister Abbas Araghchi had previously stated that Witkoff's public remarks did not align with what was being said at the negotiating table and reiterated that Tehran would continue its enrichment activities regardless of whether an agreement was reached.
By Humeyra Ayaz
Anadolu Agency