Oil prices settled higher on Thursday as expectations for a Federal Reserve rate cut lifted sentiment, while stalled Ukraine peace negotiations reduced the likelihood of Russian oil returning to the market in the near term. Brent rose $0.59 to $63.26, and WTI gained $0.72 to close at $59.67.
Crude futures briefly climbed more than a dollar earlier in the session after new U.S. labor data showed a slowing job market, fueling speculation that the Fed may deliver another rate cut at its December meeting. A softer dollar added support, making crude more attractive to buyers globally.
Analysts noted that monetary policy expectations now dominate sentiment. Lower borrowing costs would bolster economic activity and strengthen the demand outlook for oil. Rising geopolitical tension between the U.S. and Venezuela also contributed to the bid, as concerns grow over potential disruptions to Venezuelan output.
Prospects for a breakthrough in Ukraine–Russia negotiations dimmed after U.S. representatives ended discussions in Moscow without progress. Traders have been closely watching the talks, given that any agreement easing sanctions on Russian producers could inject additional barrels into an already well-supplied market. For now, uncertainty around the conflict continues to limit downside.
Ukraine’s attacks on Russian energy infrastructure remained in focus as well. Kyiv struck a section of the Druzhba pipeline—the main route supplying Hungary and Slovakia—and continued to target tankers and facilities along the Black Sea. Analysts noted that months of drone strikes have forced sustained reductions in Russian refinery throughput, with fuel output noticeably weaker heading into winter.
On the fundamentals side, U.S. inventory data offered mixed signals. Crude stocks rose by 574,000 barrels last week, while gasoline and distillate inventories also increased, reflecting stronger refinery runs but reinforcing concerns about a supply surplus heading into next year. Those worries were echoed by Fitch, which lowered its multi-year oil price assumptions due to expectations that global production growth will continue to outpace demand.
Saudi Arabia, meanwhile, cut its January official selling price for Arab Light to Asia to the lowest level in five years, underscoring the competitive pressures facing exporters in a market tilted toward oversupply. Kazakhstan also reported a decline in early December output following a Ukrainian drone strike on infrastructure linked to the CPC export system.
Despite the firmer close on Thursday, analysts said the market remains trapped between monetary-policy optimism and persistent concerns about a growing global surplus.