Oil prices were largely steady in Asian trading on Friday after rising in the previous session, as stalled diplomatic progress over the Ukraine war and firm expectations of a U.S. Federal Reserve rate cut supported sentiment.
As of 21:56 ET (02:56 GMT), Brent Oil Futures expiring in February edged 0.2% lower to $63.15 per barrel, while West Texas Intermediate WTI crude futures fell 0.3% to $59.30 per barrel.
Both contracts jumped nearly 1% on Thursday. WTI oil prices were on track for a 1.5% weekly gain.
Stalled Ukraine peace talks aid oil prices
Prices strengthened after U.S.-Russia talks held earlier this week failed to produce an immediate breakthrough toward a Ukraine ceasefire. The lack of progress dampened hopes that energy sanctions on Russian crude could be eased soon, keeping a risk premium in the market.
Analysts said the stalled meeting reinforced market expectations that supply disruptions could persist, especially after recent Ukrainian strikes on Russian energy infrastructure.
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Fed cut wagers intact; PCE data awaited
Broader support also came from expectations that the Federal Reserve could cut interest rates at next week’s policy meeting, with futures pricing in a strong probability of a 25-basis-point reduction. Investors have shifted toward the view that the Fed may begin easing as economic momentum softens.
U.S. labour market data reinforced that tone. Weekly jobless claims dropped sharply to 191,000 -- the lowest level since September 2022 -- though economists noted holiday-related volatility could have affected the reading. At the same time, a private payrolls report earlier in the week showed U.S. employers cut 32,000 jobs in November, signaling weakening hiring conditions.
Markets are now focused on the release of the U.S. Personal Consumption Expenditures (PCE) Price Index later on Friday -- the Fed’s preferred inflation gauge. A softer reading could strengthen the case for policy easing.
Source: Investing