WASHINGTON (dpa-AFX) - Crude oil edged higher on Friday as the success of a U.S. proposed peace deal to end the Russia-Ukraine war remains uncertain, with Russia adding strong preconditions.
WTI Crude Oil for January delivery was last seen trading up by $18 (or 0.31%) at $58.83 per barrel.
On the geopolitical front, U.S. President Donald Trump's administration has come up with a new 10-point plan to bring the ongoing Russia-Ukraine war to an end as soon as possible.
The tenets of the peace deal received Ukraine's President Volodymyr Zelenskyy's nod though he stated that there were some minor issues in the proposal that needs to be settled for which he was ready to talk to Trump.
Yesterday, Russian President Vladimir Putin agreed to go ahead with the U.S.-backed plan.
However, Putin has reiterated his demand to keep the territories that Russia has occupied in Ukraine and made it clear that Russia is also ready to fight if necessary.
This issue is seen as a major point of contention in the ceasefire plan.
Next week, U.S. envoy to Russia Steve Witkoff is landing in Russia to discuss the peace plans, while U.S. Army Secretary Dan Driscoll is scheduled to visit this week.
Russia is now facing sanctions on its oil exports, imposed by the U.S. and the West.
The U.S. has targeted major Russian oil corporations Rosneft and Lukoil, affecting Russian petrodollar revenues majorly.
The geopolitical risk premium remains elevated as investors see Russian obstinacy may pose as a roadblock to the ceasefire plan.
According to the U.S. Energy Information Administration, for the week ending November 21, crude oil inventories in the U.S. rose by 2.77 million barrels, rebounding from a 3.426 million barrel drop in the previous week.
Last week, Baker Hughes reported that active U.S. oil rigs fell to a 4-year low, indicating lower oil production in the near term.
Traders are now eyeing the decision of the OPEC alliance on output hikes to be announced after their upcoming meeting on Sunday. The member-nations have been gradually raising their output in 2025.
At their last meeting, the cartel agreed to raise the output at 137,000 barrels per day for the month of December. Contrary to the expectations of analysts, the group agreed to pause hikes for the first quarter of 2026.
Reuters has reported that OPEC is likely to leave the output levels unchanged in their Sunday meeting.
Expectations of a U.S. Federal Reserve rate cut keep increasing after dovish comments by several Fed governors recently.
Reports in some sections of media that Kevin Hassett, director of the National Economic Council, is emerging as the leading choice of replacing current Fed Chair Jerome Powell in 2026 added weight to the expectations. Hassett has been explicitly vocal about his preference for a low-interest-rate regime, aligning with what Trump prefers.
Analysts feel that outcomes from the OPEC meeting in the beginning of December and the Fed's meeting in the second week of December could decide the course of oil prices in the near term.
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