Oil Steady As Fed Cut And Stalled Russia/Ukraine Peace Talks Debated

Another round of peace talks begin Friday in Florida: File Image/Pixabay

Oil prices on Thursday were holding steady following the stall of peace talks between Russia and Ukraine, on the strength of expectations that the U.S. Federal Reserve would soon enact another modest rate cut, thus potentially stimulating demand.

As of 1:30 EST, Brent rose 81 cents to $63.48 per barrel, and West Texas Intermediate climbed 97 cents to $59.92.

Although the Fed became the focus for many analysts on Thursday (the organization's next meeting is scheduled for December 9-10), many others preferred to assess the impact of the stalled peace talks and Ukraine's repeated drone attacks on Russia's oil infrastructure.

Kpler stated in a report, "Ukraine's drone campaign against Russian refining infrastructure has shifted into a more sustained and strategically coordinated phase.

"This has pushed Russian refining throughput down to around 5 million barrels per day between September and November, a 335,000 bpd year-on-year decline, with gasoline hit hardest and gasoil output also materially weaker."

A new round of talks between Ukraine and Russia will take place on Friday; meanwhile, attention was also directed on South America, after U.S. president Donald Trump stoked geopolitical tensions by suggesting that his country could strike drug cartels on land in Venezuela soon.

Still, oil prices remained range bound amid a chronically bearish market, and Bloomberg pointed out that "Crude prices are down about 17 percent this year as booming supply from the Americas, coupled with hikes from the OPEC+ group itself, has exceeded subdued demand growth."

Saad Rahim, chief economist at Trafigura Group, capped the negative sentiment by telling delegates at the the Financial Times Commodities Asia Summit in Singapore, "No matter how much demand is going to come in, you just have a lot of supply…The path of least resistance for prices is likely down."