Oil prices extended their decline in early Asian trading on Friday, weighed down by geopolitical developments and persistent concerns over oversupply. West Texas Intermediate (WTI) for December delivery slipped 1.03% to $58.39 per barrel, while Brent crude for January delivery fell 0.99% to $62.75. The pullback marks the third consecutive daily decline for WTI, putting the U.S. benchmark on track for a weekly loss of more than 2%.
The latest downward move in oil prices followed reports that Ukrainian President Volodymyr Zelenskyy has agreed to work with Washington on a peace plan. Analysts warn that a potential resolution to the conflict could eventually add fresh barrels to an already fragile market, amplifying supply-side pressures. The announcement coincided with new U.S. sanctions on Russian energy majors Rosneft and Lukoil, targeting key subsidiaries in an effort to restrict Kremlin revenues. While sanctions are expected to tighten supply, traders noted that much of the impact has already been priced in.
Russian Urals crude oil prices continue to trade at steep discounts, with barrels selling as much as $23 below other global grades. This underscores the sanctions’ effect but also highlights Russia’s ability to attract buyers through aggressive pricing strategies. In the U.S., crude stockpiles unexpectedly fell by 3.4 million barrels last week, driven by strong refinery activity. Yet the bullish inventory surprise failed to lift prices, as market focus remained firmly on the geopolitical picture.
Macro-driven headwinds added to the bearish tone. Asian equities fell sharply after U.S. employment data clouded expectations for imminent Federal Reserve rate cuts, boosting the dollar and intensifying risk-off sentiment. A stronger greenback, which rallied against major and commodity-linked currencies, further weighed on dollar-priced crude.
OPEC+ on Oil Prices
OPEC+ remains a central force in shaping sentiment. The group is committed to boosting production in December before halting output increases in early 2026. If prices continue to tumble, traders expect OPEC+ to face renewed pressure to rein in supply. For now, the market’s trajectory hinges on developments in Kyiv and Washington, with peace negotiations likely to be the next major catalyst heading into December.
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