Oil prices fell about 2 percent on Friday, reaching a one-month low. The decline followed US efforts to push a Russia-Ukraine peace deal, which could increase global oil supplies. Uncertainty over US interest rates also limited investor risk appetite.
Brent crude fell USD 1.05, or 1.7 percent, to USD 62.33 per barrel, while West Texas Intermediate (WTI) dropped USD 1.17, or 2 percent, to USD 57.83. Both benchmarks are down more than 3 percent for the week, approaching their lowest closes since October 21.
Market sentiment turned bearish as Washington proposed a peace plan between Russia and Ukraine. Ukrainian President Volodymyr Zelenskiy warned the plan risked Ukraine’s freedom, while Russian President Vladimir Putin said Moscow received the proposals and could consider them a basis for peace. Analysts noted a successful deal could allow Russia, the world’s second-largest oil producer in 2024, to export more fuel.
“Markets saw some relief on risks to Russian oil supply,” said Jim Reid, managing director at Deutsche Bank. However, analysts cautioned that an agreement remains uncertain, and Kyiv has rejected several Russian demands. Questions also remain about the impact of new US sanctions on Russian oil producers Rosneft and Lukoil.
Other factors influencing oil prices included a stronger US dollar, making dollar-denominated oil more expensive for international buyers. Uncertainty over US monetary policy also weighed on markets. Dallas Fed President Lorie Logan suggested keeping rates on hold for now, while Boston Fed President Susan Collins said rates remain appropriate. New York Fed President John Williams added that future rate cuts are possible.
Economic data also pressured markets. US factory activity slowed to a four-month low in November due to rising import tariffs, restraining demand and increasing unsold inventories. Analysts said these factors could limit overall economic growth.
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Overall, oil prices remain volatile, with geopolitical developments, US monetary policy, and economic indicators shaping short-term market trends.
