Oil prices fell for a second day on Wednesday as investors waited to see if peace talks in the Russia-Ukraine war could open up more supply.
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Oil prices were steady on Friday, supported by stalled Ukraine peace talks, though gains were offset by expectations of a supply glut.
Brent crude rose 41 cents, or 0.65%, to $63.67 per barrel by 10:07 a.m ET. U.S. West Texas Intermediate rose 36 cents, or 0.6%, to $60.03 a barrel.
“It is quite flat today and this week had a narrow trading range,” said Tamas Vargas, an oil market analyst at PVM. “The lack of progress in the Ukrainian peace talks provides a bullish backdrop but on the other hand, resilient OPEC production provides a bearish backstop. These two opposing forces make trading seemingly quiet.”
The market is also assessing the impact of a possible U.S. Fed rate cut and tensions with Venezuela, both of which could boost oil prices, analysts said.
Of economists surveyed in a November 28 to December 4 Reuters poll, 82% expected a 25-basis-point interest rate reduction at next week’s Federal Reserve policy meeting. A rate cut would stimulate economic growth and energy demand.
“Looking ahead, supply factors remain in focus. A peace deal with Russia would bring more barrels to the market and likely push prices down,” said Anh Pham, a senior research specialist at LSEG.
“On the other hand, any geopolitical escalation will drive prices higher. OPEC+ has agreed to keep production steady until early next year, so it adds some support for prices too,” he said.
Markets also continued to brace for a potential U.S. military incursion into Venezuela after President Donald Trump said late last week the U.S. would start taking action to stop Venezuelan drug traffickers on land “very soon”.
Rystad Energy said in a note that such a move could put at risk Venezuela’s 1.1 million barrels per day of crude oil production, which goes mostly to China.
Prices were also boosted this week by the failure of U.S. talks in Moscow to achieve any significant breakthrough over the war in Ukraine, which could have included a deal to let Russian oil back into the market.
Those factors kept prices supported despite a growing surplus.
Saudi Arabia cut its January Arab Light crude selling prices to Asia to the lowest level in five years amid oversupply, according to a document reviewed by Reuters on Thursday.
