Oil prices moved higher on Monday, recovering some of last week’s losses as traders grew more confident that the Federal Reserve may deliver another rate cut in December while doubts mounted over the likelihood of a Russia-Ukraine peace deal materializing anytime soon. Brent rose $0.81 to $63.37, and WTI gained $0.78 to $58.84, with both benchmarks bouncing after closing Friday at their lowest levels since October 21.
Much of the early downside pressure in recent sessions came from reports suggesting progress in peace negotiations, but momentum on that front appeared far less certain on Monday. Washington and Kyiv continued working through a U.S. proposal that Ukrainian and European officials criticized as too favorable to Moscow, and there was little indication that either side was close to agreement. The market had priced out more than 5% of geopolitical risk premium over the past week, a move many traders now see as excessive given the potential for talks to stall and tensions to flare again.
Fresh U.S. sanctions on Rosneft and Lukoil officially took effect Friday, adding friction to Russian logistics that would normally lend support to crude. Instead, concerns that a peace deal might eventually unlock more Russian barrels kept the market cautious. At the same time, Russian fiscal data suggested strain: state oil and gas revenue for November is projected to fall more than 30% year-over-year due to weaker prices and a stronger ruble.
Expectations for easier U.S. monetary policy helped steady the broader risk backdrop. A Federal Reserve governor signaled that labor-market softness could justify another 25-bp cut, lifting hopes for stronger economic activity — and by extension, fuel demand — heading into year-end. Markets remain split on whether the Fed will act at the December meeting after last week’s conflicting signals on employment and unemployment.
Global indicators were mixed. Business sentiment in Germany weakened again in November, underscoring the challenges facing Europe’s largest economy. Meanwhile, traders took note of geopolitical developments elsewhere: the U.S. added a terrorism designation tied to Venezuelan leadership, reinforcing sanctions that continue to limit the country’s oil exports. And a phone call between President Trump and China’s President Xi, covering Ukraine, fentanyl enforcement, and agricultural trade, was viewed as modestly supportive for demand expectations in the world’s two largest oil-consuming nations.