WTI Sinks As Ukraine Talks And Oversupply Weigh On Markets

Wedoany.com Report-Nov 16,  Oil snapped its three-day relief rally as traders used signs of cooling tensions between Russia and Ukraine to position for an oversupplied market in the coming months.

West Texas Intermediate fell 2.4% to settle cents above $67 a barrel, the lowest close since September. Brent settled barely above $71. WTI ended the week almost 5% lower, steered by large losses on Monday and Friday. An increasingly dour 2025 outlook and a report about ceasefire talks progressing in the Middle East applied more than enough bearish pressure to overcome small midweek gains.

During Friday’s session, traders reacted to news that Ukraine is calling for action to force Russia toward peace, even though Ukrainian President Volodymyr Zelenskiy said talks between Germany and Russia will do little to advance “the pursuit of a just peace.” If peace talks do progress and the war were to end, it could lower shipping costs and thus crude prices, particularly if Europe were to begin accepting Russian barrels again, traders said.

“Everyone is just looking for an excuse to sell or get short,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group.  

Fresh data from China on Friday added to an already gloomy demand picture, with apparent oil consumption in the world’s biggest crude buyer declining year over year. OPEC this week slashed its own demand forecast for the fourth straight month while, on the supply side, the International Energy Agency warned of a 1 million barrel-a-day surplus next year.

Also weighing on prices this week: A gauge of the dollar rallied to the highest in two years following Donald Trump’s US election victory. And Hezbollah is weighing a ceasefire proposal that would end the ongoing Israeli offensive in Lebanon, CNN reported — deflating any remaining risk premium.

Crude has been alternating between weekly gains and losses since mid-October, buffeted by tensions in the Middle East, the prospect of oversupply and shifts in currency markets. Year-to-date, WTI has retreated by more than 6%, after grazing its lowest since 2021 in September.