Oil prices stabilized on Wednesday (November 26th) after closing at a one-month low amid White House optimism about a peace deal between Russia and Ukraine, a development that could ease Moscow's oil restrictions in an already oversupplied market.

West Texas Intermediate crude oil prices hovered around $58 a barrel, with volumes likely to decline ahead of Thursday's Thanksgiving holiday in the US. Steve Witkoff, US President Donald Trump's envoy, will lead a delegation for talks in Russia next week aimed at ending the nearly four-year war, a Kremlin official said.

The Ukrainian leader's chief of staff said the negotiations in Geneva have laid a "good foundation." However, any peace deal still faces the same obstacles as in the past: What satisfies Ukraine will likely be a dealbreaker for Russia, and vice versa.

Most of Russia's oil and fuel are subject to heavy Western sanctions, with US restrictions on the two largest producers taking effect last week. However, China, India, and Turkey have been enthusiastic buyers of crude oil, making the impact of lifting restrictions on global prices difficult to gauge.

"Minor adjustments between the U.S., Russia, Ukraine, and the European Union regarding a proposed peace deal have been carefully digested by the market," Standard Chartered analysts including Emily Ashford wrote in a note. "Any positive signs of collaboration or agreement have resulted in short-term selling, while waning enthusiasm has boosted prices."

Meanwhile, in the U.S., the Energy Information Administration (EIA) reported on Wednesday that overall crude inventories rose by 2.8 million barrels, while gasoline and distillate inventories also rose. This did little to ease concerns about a growing oversupply.

Oil has fallen by more than a fifth since mid-June as the Organization of the Petroleum Exporting Countries (OPEC) and its allies restore supplies, while producers outside the group also pump more. Global crude supply is expected to exceed demand by a record 4 million barrels per day next year, according to an International Energy Agency forecast this month.

Goldman Sachs Group Inc. said a peace deal could cut Brent crude prices by about $5 per barrel from its baseline forecast of $56 next year. "That would put Brent in the $50s in 2026," analyst Daan Struyven told Bloomberg TV.

WTI for January delivery was steady at $58.01 per barrel at 11:26 a.m. in New York. Brent for January settlement was trading at $62.41 per barrel. (alg)

Source: Bloomberg