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Putin to visit UAE, Saudi Arabia this week

Russian President Vladimir Putin travels to the Middle East this week, visiting the UAE and Saudi Arabia to discuss oil, trade, and geopolitical issues. The trip comes as Russia aims to strengthen ties with the oil-rich nations at a time of conflict in Ukraine and tensions with the West.

Yahoo Finance's Senior Business Reporter Ines Ferre analyzes the implications of Putin's visit against the backdrop of volatile energy markets, while also providing insights into the current oil and energy price outlooks.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video transcript

- And Vladimir Putin is heading to the Middle East. In the rare trip, Putin visiting both Saudi Arabia and the UAE to discuss the oil markets, world conflicts, and trade. For more on this, we've got Yahoo Finance's reporter Ines Ferre here with us. Ines, what do we know so far about this?

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INES FERRE: Yes, Brad. So this is an important trip for Vladimir Putin because since the invasion of Ukraine last year, the West has really tried to isolate Vladimir Putin. You've had also in March, you had the International Criminal Court that had issued an arrest warrant for crimes against humanity. So he hasn't taken that many trips outside of Russia since the invasion of Ukraine.

So he is now going to the UAE, and he's also going to Saudi Arabia. And this is important because both of those nations hadn't signed that petition from the ICC, but also they are both allies of Russia, and they are both OPEC Plus members. So this trip comes on the heels of OPEC Plus last week, their meeting, where they announced a deepening of sanctions. That meeting had been overshadowed because of internal disagreements on further cuts.

So this is an important trip for him because it shows, look, we are all united on the same page when it comes to these cuts, and we are all collaborating. You had some smaller countries that didn't want so many cuts. They wanted to regain some market share. And if you take a look at crude, what happened with crude, on the day of that meeting, crude went down. But also since those cuts were announced, you have WTI that is at $70 a barrel last week. Last Thursday, WTI closed at $75 a barrel. You had Brent last Thursday that was at $82. It is now at $75. WTI is at $70 a barrel.

And year to date, you have both WTI and Brent that are down about 8%, more than 7% year to date. So what this is showing the market or what this is showing you is that despite these OPEC Plus cuts, you are still seeing oil going down further, guys.

- All right. And speaking of just general patterns in the energy market, Ines, we've also seen gas and diesel prices start to decline. What can we expect in terms of the direction of that sector of energy to go?

INES FERRE: Yeah. You can expect it to continue to go down until about the spring time. But I want to show you where we're at with gasoline and with diesel. Because we have seen, as you mentioned, a downtrend since about mid-September, and we are continuing with that. You're looking at gasoline that's at $3.22 per gallon. A month ago, it was at $3.42. Diesel today is at $4.17 a gallon. A year ago, it was at $5.06.

So we're actually seeing right now a sort of acceleration of a decline when it comes to diesel. And analysts are saying that you can expect supply for both fuels likely to rise. If Europe has a milder winter, you can expect stockpiles there to increase. And also China recently cut its fuel prices. So this doesn't bode that well as far as demand is concerned for fuel. What it does bode well is that you can expect to continue to see gasoline diesel prices going lower. This should bode well also for inflation, guys.

- All right. Ines Ferre. Thank you so much for the deep dive on the energy sector.