Oil prices took a breather after last week’s decline as investors weigh the chances of a US rate cut and a possible peace deal between Russia and Ukraine. Brent and WTI crude futures hit their lowest levels since October 21.
Oil prices took a breather on Monday after falling about 3% last week, as investors weighed the chances of a US rate cut with the prospect of a deal between Russia and Ukraine that could free up more Russian supplies through easing sanctions, Reuters reports, writes UNN.
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The United States and Ukraine were poised to resume work on a revised peace deal plan before the deadline set by US President Donald Trump on Thursday, November 27, after agreeing to adjust an earlier version that critics called too favorable to Moscow.
Brent crude futures were unchanged at $62.56 a barrel by 04:58 GMT (06:58 Kyiv time), while West Texas Intermediate crude futures fell 2 cents, or 0.03%, to $58.04 a barrel. Both benchmarks reached their lowest levels since October 21.
“The sell-off was mainly driven by President Trump’s persistent push for a peace deal between Russia and Ukraine, which markets view as a fast track to unlocking significant volumes of Russian supplies,” IG analyst Tony Sycamore wrote in a note.
He added that steps towards a deal significantly outweigh the short-term losses caused by US sanctions against state-owned Rosneft and private company Lukoil, which came into effect on Friday.
Due to sanctions, nearly 48 million barrels of Russian oil are frozen at sea, the publication writes.
US President Donald Trump set a deadline for the deal for Thursday, although European leaders are pushing for its improvement.
A peace deal could lift sanctions that are curbing Russian oil exports. According to the US Energy Information Administration, Russia was the world’s second-largest oil producer in 2024, after the US.
Uncertainty about a US interest rate cut is another factor holding back investor appetite.
However, the probability of a rate cut next month increased after New York Federal Reserve President John Williams suggested the possibility of a cut in the near future.
“Expectations of a possible Fed rate cut in December could also balance bearish sentiment, boosting global risk appetite,” said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.
“Oil prices have already fallen by almost 17% this year, reflecting persistent negative sentiment… at these lower levels, a gradual emergence of demand for valuable assets is expected,” she pointed out.