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Oil Drops to 4-Week Lows as Peace-Talk Hopes Sap War Premium and Stronger Dollar Weighs

Washington’s Ukraine diplomacy coincided with new sanctions on Rosneft and Lukoil, prompting a reset of market risk.

Overview

  • Brent hovered near $62 and WTI near $58 after a third straight decline, with futures down roughly 1%–1.7% on the day and set for about a 3% weekly loss.
  • President Volodymyr Zelenskiy said he would work on a US‑ and Russia‑drafted peace plan, pressuring prices as the perceived conflict premium eased, though analysts cautioned any accord remains uncertain.
  • U.S. measures against Rosneft and Lukoil took effect Friday, with traders questioning their impact on flows and noting Lukoil’s December 13 deadline to sell international assets.
  • A firmer U.S. dollar and reduced odds of a December Federal Reserve rate cut curbed risk appetite and added to the downdraft in crude and gasoline.
  • Oversupply signals built as OPEC revised Q3 to a 500,000 bpd surplus, OPEC+ restored 137,000 bpd for December, U.S. output projections rose, and floating storage increased, even as earlier Russian export disruptions faded.