Oil prices extended their losses for a third consecutive session on Friday, pressured by U.S. efforts to broker a peace agreement between Russia and Ukraine—a development that could bring additional supply to global markets—and by growing uncertainty over a potential U.S. interest rate cut.
Brent crude futures slipped 71 cents (1.12%) to $62.67 a barrel as of 02:12 GMT, after a modest 0.2% decline on Thursday. U.S. West Texas Intermediate (WTI) fell 71 cents (1.20%) to $58.29, following a 0.5% drop in the previous session, Reuters reported.
Both benchmarks are on track to fall more than 2% for the week, weighed down by concerns about rising supply.
U.S. Peace Push Dampens Risk Premium
Washington is actively promoting a peace plan aimed at ending the three-year conflict between Russia and Ukraine. The possibility of an agreement—however slim—has already influenced crude markets by reducing the geopolitical risk premium that has supported oil prices.
This comes as sanctions on Russian oil giants Rosneft and Lukoil formally take effect Friday. Lukoil has been given until December 13 to divest from its extensive international holdings.
“With Ukraine not yet formally rejecting the deal, the slim chances of reaching an agreement are impacting prices, as this would eliminate much of the geopolitical risk premium for war that has been added to the price of crude,” said Tony Sycamore, market analyst at IG.
Stronger Dollar Adds Pressure
A strengthening U.S. dollar also weighed on oil, making crude more expensive for buyers using other currencies. The dollar is poised for its strongest weekly performance in over a month as investors increasingly believe the Federal Reserve will not cut interest rates next month.
