Oil prices continued to fall on Friday as investors reacted to diplomatic moves involving Washington, Moscow, and Kyiv. Traders said the prospect of a peace framework, however uncertain, added pressure to a market already dealing with softer demand and cautious expectations for U.S. rate cuts.
Brent crude traded at 62.45 dollars a barrel in early Asian hours. U.S. West Texas Intermediate moved down to 58.02 dollars. Both benchmarks headed for weekly losses of more than 2.5 percent, which erased most of last week’s gains.
Traders weigh peace signals, sanctions, and currency pressure
Market sentiment shifted after the United States pushed for a draft peace plan aimed at ending the three-year conflict. Ukrainian President Volodymyr Zelenskiy agreed to review the proposal, and that single development added speculation that global oil flows could increase if tensions ease. Analysts at Saxo said the news removed part of the geopolitical premium that had supported crude prices.
Nevertheless, many observers warned that the path to any deal remains long. Kyiv has dismissed several Russian proposals in the past, and ANZ analysts noted that the two sides remain far apart on core issues. Because of that, they said a breakthrough is “far from certain.”
Additional pressure came from sanctions targeting Rosneft and Lukoil. These restrictions take effect on Friday, although several analysts doubt they will meaningfully cut Russian exports. Lukoil must also offload its international assets by December 13, further complicating the company’s position in global markets.
At the same time, a stronger dollar weighed on crude prices. Investors reduced expectations for a Federal Reserve rate cut in December after reviewing minutes from the central bank’s divided October meeting. Asian currencies weakened as the dollar posted one of its strongest weeks in more than a month.
Because oil is priced in dollars, a stronger U.S. currency makes the commodity more expensive for buyers using other currencies, which often cools demand. This combination of diplomatic uncertainty, sanctions, and currency strength shaped the downward trend in crude markets throughout the week.