Oil falls on drawn-out Ukraine peace talks, all eyes on upcoming OPEC+ meeting
A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
HOUSTON :Crude futures fell marginally on Friday as investors considered oil's geopolitical risk premium amid drawn-out Russia-Ukraine peace talks, while keeping an eye on Sunday's OPEC+ meeting for clues about potential output changes.
U.S. West Texas Intermediate crude futures resumed trading after being frozen due to a system outage at exchange operator CME Group, blamed on a cooling issue at CyrusOne data centres. Brent trades on the Intercontinental Exchange, or ICE.
Front-month Brent crude futures for January, which expire on Friday, settled down 14 cents, or 0.22 per cent, at $63.20 a barrel. The more active February contract settled at $62.38, down 49 cents on Thursday's close.
WTI crude settled at $58.55 a barrel, down 10 cents, or 0.17 per cent, from Wednesday's close. There was no settlement on Thursday due to the Thanksgiving holiday in the U.S.
LONGEST LOSING STREAK SINCE 2023
Despite being up around 1 per cent for the week, both contracts settled down for the fourth straight month, their longest losing streak since 2023, as expectations for higher global supply weighed on prices.
The strength of fuel refining profit margins has supported crude demand in some places, but the bearish impact of an expected oil surplus is pressuring prices, said Rystad analyst Janiv Shah.
U.S. oil production rose to record highs in September, data from the Energy Information Administration showed on Friday, deepening concerns that the market is heading towards a surplus.
U.S. crude oil output rose 44,000 barrels per day in September to a record 13.84 million bpd, according to the EIA data.
A Reuters survey of 35 economists and analysts showed respondents expect Brent to average $62.23 per barrel in 2026, down from October's forecast of $63.15. The benchmark has averaged $68.80 per barrel so far in 2025, LSEG data showed.
Signs that a peace deal between Ukraine and Russia might be close pushed oil prices down sharply earlier this week, but they have recovered over the past three sessions as negotiations dragged on.
"Futures had been anticipating some sort of a peace agreement which has kept pressure on prices," Dennis Kissler, senior vice president of trading at BOK Financial, said in a note on Friday.
"Still, little is known at this time, and no agreement will likely mean even tighter sanctions on Russia's oil exports."
On Sunday, OPEC+ is likely to leave oil output levels unchanged at its meetings and to agree on a mechanism to assess members' maximum production capacity, two delegates from the group and a source familiar with the group's talks told Reuters.
Saudi Arabia, the world's biggest oil exporter, is expected to lower its January crude price for Asian buyers for a second month to its lowest in five years, under pressure from ample supplies and the surplus outlook, sources told Reuters on Friday.
