Key Points
- Oil prices are nearly flat, with Brent crude trading around $63 a barrel.
- The market is watching for developments in U.S.-led peace talks to end the war in Ukraine.
- Most traders are skeptical that a peace deal will lead to a quick increase in Russian oil supply.
- OPEC and its allies are meeting this weekend to decide on future oil production levels.
Oil prices were stuck in a holding pattern as investors balanced hopes for a peace deal in Ukraine against an upcoming meeting of major oil producers. With many U.S. traders away for the Thanksgiving holiday, the market saw little movement.
Brent crude hovered near $63 a barrel, barely changed for the week. The market is trying to figure out what to make of the U.S.-led diplomatic effort to end the war in Ukraine. A peace deal could eventually mean more Russian oil hitting the global market, which would push prices down. However, traders remain highly skeptical.
While a U.S. envoy is set to visit Moscow next week, and Russian President Vladimir Putin has called the U.S. plan a potential basis for a deal, major hurdles remain. A recent Bloomberg survey of nearly 20 oil traders found that most don’t expect a peace deal to happen at all. Even if one is signed, they believe it would take a long time before Russian oil flows increase significantly.
Adding to the uncertainty, OPEC and its allies are scheduled to meet on November 30. Eight members of the group have already decided to stop boosting oil output in the first quarter of next year, following a period of rapid increases. Their decision on future production levels will be a key driver for prices.
This tug-of-war between potential oversupply and production cuts has put crude on track for its fourth straight monthly price drop. As one Barclays analyst noted, even if a diplomatic breakthrough occurs, it’s “unlikely to lead to a material increase in Russian output in 2026.”
