Crude oil prices have declined for three consecutive days, with Brent crude briefly dipping to $61 per barrel on Friday, reflecting the prevailing bearish sentiment in the oil market. However, crude was not the worst performer in the broader commodity sell-off last week. Notably, oil's inflection points this year have largely aligned with the broader commodity index (except for July's counter-trend rally), challenging perceptions of oil as a unique commodity.

While macroeconomic volatility influenced oil prices, the more disruptive factor was the U.S.-proposed 28-point peace plan for resolving the Russia-Ukraine conflict. This unexpected development forced market participants to recalibrate their trading strategies, as evidenced by oil's sustained decline. The proposal has shifted market sentiment from equilibrium to renewed weakness, removing a key bullish catalyst - the geopolitical risk premium - even though European opposition suggests ongoing negotiations.

Interestingly, Brent's nearby spreads have shown resilience despite the price slump, even strengthening during recent sessions. This indicates that Russian sanctions continue to materially disrupt European supply - a reality that persists despite shifting expectations. The market remains divided between concerns about post-settlement bearishness and acknowledgment of current supply constraints.

Geopolitical uncertainties continue mounting. Ukraine faces intensified pressure to accept the U.S. peace framework within a week, with Washington threatening intelligence and arms supply cuts. While European powers acknowledged the proposal as a basis for discussion, they've drafted a counter-proposal demanding NATO-style security guarantees for Ukraine. German Chancellor noted that reaching consensus remains distant, emphasizing any resolution requires Ukrainian and European approval.

Russian President Putin stated the U.S. plan could serve as a negotiation basis but requires detailed discussion. Meanwhile, Russian officials dismissed Europe's proposal as "a plan to continue war." Despite progress in U.S.-Ukraine Geneva talks, fundamental disagreements persist, particularly Europe's strong opposition after three years of economic sacrifices under U.S.-led sanctions.

Market observers note the proposal disproportionately favors Russia, yet Ukrainian President Zelensky's measured response suggests potential leverage held by the U.S. With all parties showing weariness from prolonged conflict, the possibility of compromise exists, but the path remains uncertain. For oil markets, even the proposal's emergence has introduced bearish pressure, as any sanctions relief on Russia would exacerbate existing oversupply concerns.

Elsewhere, the U.S. appears poised for new actions against Venezuela, possibly including regime change attempts, while Iran has suspended cooperation with the IAEA after a critical nuclear resolution. The Islamic Revolutionary Guard Corps warned of heightened conflict readiness with Israel and the U.S.

Fundamentally, global oil inventories continue rising, with floating storage increasing by 190 million barrels since September. VLCC rates remain elevated, with Middle East-to-China rates reaching WS123.69, up 5.13% weekly.

Given persistent oversupply and geopolitical uncertainties, analysts recommend caution against aggressive short positions, suggesting option strategies instead. The prevailing trading approach remains patient waiting for rebound-driven selling opportunities, with close attention to timing.