Oil Rebounds On Fed Cut Hopes And Ukraine Peace Doubts

Meanwhile, Russia oil and gas revenues are heading for a nosedive: File Image/Pixabay

Revived speculation that the U.S. Federal Reserve will cut rates – thereby indirectly stimulating demand – was the main reason why oil prices on Monday enjoyed a gain of about 1 percent.

Brent settled up 81 cents, or 1.3 percent, at $63.37 per barrel, and West Texas Intermediate settled up 78 cents (also 1.3 percent) at $58.84.

The focus on the Fed was provoked by that organization's governor, Chrtistopher Waller, who said data indicates that the U.S. jobs market is weak enough to warrant another quarter-point cut, presumably at its December meeting.

Oil was also supported by creeping doubts that Ukraine will accept a peace deal proposed last week by U.S. president Donald Trump that would see it cede land to the former Soviet Union and downsize its armed forces.

But for the record, Ukraine and European allies said that while key sticking points remained, progress had been made in winning more favorable terms for Kyiv.

Dennis Kissler, senior vice president for trading at BOK Financial, forecasted choppy trading and short covering into the holiday period, and remarked in reference to the days ahead that "Oil markets are moving in sympathy with equities and awaiting on more news of the Ukraine/Russia talks."

In addition to the peace deal, Trump was also said to be responsible for contributing to Monday's oil price gain after what he described as a "very good" talk with China president Xi Jinping; traders view any positive interaction between the two countries as good for oil demand.

In other oil news on Monday, calculations undertaken by Reuters showed that Russia's oil and gas revenues were set to plummet by 35 percent this month, due to the plunging price of that country's crude as well as a strengthening Ruble.

These revenues are the single biggest funding mechanism for Russia's war against Ukraine.