Oil prices fell for a second straight day on Wednesday as investors waited to see whether peace talks in the Russia-Ukraine war would allow for more supplies.
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Oil prices stabilized on Friday, supported by stalled Ukraine peace talks, but gains were offset by hopes of a supply glut.
brent Oil prices rose 41 cents, or 0.65%, to $63.67 per barrel by 10:07 a.m. ET. us west texas intermediate It rose 36 cents, or 0.6%, to $60.03 per barrel.
“It was pretty much flat today and we had a narrow trading range this week,” said Tamas Vargas, oil market analyst at PVM. “The lack of progress in the Ukraine peace talks is a bullish backdrop, while the recovery in OPEC production is a bearish backdrop. These two opposing forces are keeping the deal seemingly quiet.”
Analysts said markets were also assessing the impact of a potential rate cut by the U.S. Federal Reserve and tensions with Venezuela, both of which could push oil prices higher.
82% of economists surveyed in a Reuters poll conducted Nov. 28-Dec. 4 expected a 25 basis point rate cut at next week’s Federal Reserve policy meeting. Lower interest rates would stimulate economic growth and energy demand.
“Looking ahead, supply factors will continue to be a focus. A peace deal with Russia will likely bring more barrels to market, pushing prices down,” said Ann Pham, senior research specialist at LSEG.
“On the other hand, geopolitical escalation will push prices higher. OPEC+ has agreed to keep production stable until early next year, which will also provide some support to prices,” he said.
Markets continued to brace for a possible U.S. military invasion of Venezuela after President Donald Trump said late last week that the U.S. would begin action “immediately” to stop Venezuelan drug traffickers on land.
Rystad Energy said in a note that such measures could jeopardize Venezuela’s 1.1 million barrels per day of oil production, mostly destined for China.
Prices were also boosted this week by the failure of U.S. talks in Moscow to achieve significant progress on the Ukraine war, which could have included a deal to put Russian crude back on the market.
These factors kept prices steady despite widening surpluses.
Saudi Arabia cut the price it sells Arab Light crude oil to Asia in January to the lowest level in five years amid a supply glut, according to a document reviewed by Reuters on Thursday.
