Oil prices reversed course after Friday's decline as US-led talks to end Russia's war in Ukraine failed to produce a breakthrough, and China pledged to support growth next year.

West Texas Intermediate (WTI) prices reached over $58 per barrel, while Brent neared $62. The US has stepped up efforts to end the war, but sticking points remain, highlighting the difficulty of reaching a deal. President Donald Trump said he had made progress in talks on Sunday with Ukrainian President Volodymyr Zelenskiy at Mar-a-Lago.

Zelenskiy said he asked Trump for security guarantees for 30 to 50 years. An end to the conflict could allow more Russian oil into the oversupplied market.

Oil prices are still on track for a fifth monthly decline in December, which would be the longest losing streak in more than two years. Oil prices have been pressured by concerns about a global oversupply following increased supply from members of the OPEC+ cartel and countries outside the group. Geopolitical tensions from Venezuela to Nigeria have helped curb price declines in recent weeks.

Regarding Ukraine, the lack of a breakthrough is providing support for prices, said Gao Mingyu, chief energy analyst at China Futures Co., citing issues including the fate of the Donbas region, which is partially occupied by Russian forces. "It feels like there's still a tug-of-war ahead," he said.

Meanwhile, China pledged to expand its fiscal spending base next year, according to a statement from the Ministry of Finance on Sunday, signaling government support for boosting growth. The world's largest crude oil importer has faced headwinds amid a property market downturn and external pressures, including trade friction with the US. At the same time, Beijing's strong crude stockpiling is expected to continue, helping absorb the surplus.

Meanwhile, Trump and Israeli Prime Minister Benjamin Netanyahu are expected to discuss potential new strikes against Iran over its ballistic missile program and the rebuilding of nuclear sites hit by the US in June during their meeting on Monday. Resurgent tensions in the Middle East, source of about a third of the world's supply, could jeopardize crude oil flows from the region.

In Venezuela, the Trump administration has imposed a partial maritime blockade in recent days, backed by the largest U.S. military deployment to the region in decades. Trump said in a radio interview that the U.S. had disabled a "major facility" last week, apparently referring to an attack on a suspected drug trafficking site, as reported by the New York Times. Venezuela has described the U.S. action as illegal and an attempt at regime change.

WTI for February delivery rose 2.50% to $58.16 per barrel as of 10:47 a.m. New York time. Brent crude for February delivery rose 2.28% to $62.02 per barrel. (alg)

Source: Bloomberg