Oil prices held on to most gains from the previous session in early trading on Thursday as investors awaited U.S.-China trade talks later in the day.
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U.S. crude oil on Tuesday hit the lowest level since May, putting prices on pace for the worst performance in seven years as traders factor in a looming surplus and the possiblity of a peace agreement in Ukraine.
West Texas Intermediate hit $55.69 per barrel while Brent touched $59.42, the lowest level for the benchmarks since May 5.
The U.S. benchmark has lost about 22% this year for its worst performance since 2018. The global benchmark has shed nearly 20% for its worst year since 2020.
U.S. crude was last trading 2.13% lower at $55.61 per barrel while Brent was down 1.93% at $59.39. U.S. gasoline prices, meanwhile, have fallen below $3 per gallon to the lowest level in four years, according to the motorist association AAA.
The oil market is under pressure this year as OPEC+ members have rapidly ramped up production after years of output cuts. Investors are also pricing in the possibility of lower geopolitical risk as President Donald Trump pressures Ukraine to accept a peace agreement with Russia.
The threat of supply disruptions has loomed over the oil market since Russia launched its full-scale invasion of Ukraine in 2022. Kyiv has launched repeated drone strikes on Russian oil infrastructure this year. The U.S. and its European allies, meanwhile, have targeted Russia’s crude industry with sanctions.