- Oil prices were steady as investors weighed peace talks against the impact of new US sanctions on Russian supply.
- OPEC and its allies are likely to keep production unchanged at their upcoming meeting.
- Traders expect crude to remain range-bound through year-end amid thin liquidity and anticipation of the December Federal Reserve decision.
Oil prices drifted sideways on Thursday, leaving traders to balance the faint promise of movement on peace talks between Russia and Ukraine against the drag of Western sanctions on Moscow’s energy exports.
Markets were already subdued as the United States settled into the Thanksgiving holiday, thinning out trading volumes and muting any sharp moves.
By late morning in London, Brent crude was hovering at $63.22 a barrel, edging up by a few cents. West Texas Intermediate followed a similar pattern at $58.84.
The mood across the market was quiet, but there was an undercurrent of anticipation as diplomats once again tried to find a route out of the nearly four-year conflict that has altered the global energy landscape.
Tentative diplomacy raises hopes but traders remain cautious
Washington is sending envoy Steve Witkoff to Moscow next week, accompanied by senior officials, to sound out what may be the most serious peace discussion in months. The war, the deadliest in Europe since the mid-20th century, has reshaped supply routes and repeatedly jarred energy markets.
Even so, Moscow’s tone has remained firm.
A senior Russian diplomat underscored on Wednesday that the Kremlin has no intention of making sweeping concessions, particularly after a leaked recording revealed Witkoff advising Russian officials on how to frame proposals to President Donald Trump.
Analysts at Barclays said the political crosswinds were still strong enough to keep traders from committing heavily in either direction, noting that hopes of a ceasefire were balancing concerns about new US sanctions targeting major Russian oil producers. The bank described the moment as one of lingering geopolitical volatility.
Attention is also turning to the weekend gathering of OPEC and its allies. Several sources within the group indicated that member states are leaning towards keeping output steady, despite some producers having quietly raised their volumes since April in an effort to claw back market share. Combined, the alliance accounts for roughly half of the world’s oil supply and its decisions continue to set the tone for price movements.
Elsewhere, expectations are rising that the US Federal Reserve may cut interest rates in December. A rate cut typically supports economic activity and can stir stronger oil demand. Markets, however, have priced in little more than a steady glide toward the end of the year. Analysts warn that unless the Fed strikes a surprisingly hawkish note at its 10 December meeting, crude is unlikely to break out of its narrow range.
Kelvin Wong of OANDA said the market now appears to be drifting towards the year-end with a lack of clear direction, pointing to muted liquidity. He expects WTI to stay locked between $56.80 and $60.40 until further signals emerge.
