Oil Prices Steady Amid Stalled Ukraine Peace Talks

Oil prices held steady on Friday as stalled Ukraine peace talks provided support, while expectations of rising supply limited gains.

sarah

Dec 5, 2025 - 22:04

Oil Prices Steady Amid Stalled Ukraine Peace Talks

Oil prices remained stable on Friday, supported by stalled peace talks in Ukraine, although expectations of a further supply increase reduced gains.

"It's fairly flat today and the trading range this week was also narrow," said Tamas Vargas, an oil market analyst at PVM. "The lack of progress in Ukrainian peace talks provides a bullish backdrop, but on the other hand, strong OPEC production provides a bearish backstop. Trading appears calm due to these two opposing forces."

Analysts said the market is also anticipating a possible rate cut by the U.S. Fed and the impact of tensions with Venezuela, both of which could boost oil prices.

82% of economists surveyed in a Reuters poll from November 28 to December 4 expected a 25-basis-point interest rate cut at next week's Federal Reserve policy meeting. A rate cut would boost economic growth and energy demand.

"Looking ahead, supply factors are in focus. A peace deal with Russia would bring more barrels into the market and possibly lower prices," said Ann Pham, senior research specialist at LSEG.

"On the other hand, any geopolitical escalation would further boost prices. OPEC+ has agreed to keep production stable until early next year, so this also provides some support to prices."

Markets are also bracing for a possible US military incursion into Venezuela after President Donald Trump said late last week that the US would begin taking action to stop Venezuelan drug traffickers on the ground "very soon."

Rystad Energy said in a note that such a move could jeopardize Venezuela's crude oil production of 1.1 million barrels per day, which mostly goes to China.

Prices also rose this week as US talks in Moscow on the war in Ukraine failed to yield any major breakthrough, which could have included a deal to bring Russian oil back into the market.

These factors supported prices despite the growing surplus.

Saudi Arabia cut its January Arab Light crude sales prices to Asia to the lowest in five years due to oversupply, according to a document reviewed by Reuters on Thursday.