Oil News: Demand Fades Fast While Peace Talks Undercut the Short-Term Oil Outlook

Crude Oil News Today: Sellers Drive a Sharp Breakdown in WTI Futures

Light crude oil futures are sliding sharply into the weekend, with traders leaning on a decisive break below the 61.8% retracement support at $58.44 and last week’s swing bottom at $58.07.

Early selling pressure accelerated once these levels gave way, triggering liquidation from short-term traders who had been watching those technical markers as key lines of defense.

With bearish sentiment dominating Friday’s session, market attention has shifted toward the next major downside objectives: the October 20 main bottom at $55.91 and the May 30 main bottom at $55.22.

Short-term recovery attempts hinge on whether buyers can reclaim former support levels at $58.44 and $59.23. Above that, the 50-day moving average at $60.52 stands as the next major resistance level and the point where fresh selling interest is likely to re-emerge unless broader fundamentals improve.

At 11:55 GMT, Light Crude Oil Futures are trading at $57.90, down $1.07 or -1.81%.

Oil Prices Forecast Under Pressure from Geopolitical Negotiations

Fresh geopolitical developments are hitting crude markets as Washington pushes for a Russia-Ukraine peace framework that traders believe could increase future supply.

The prospect of a diplomatic breakthrough has driven both major crude benchmarks down more than 2% on the day, extending the week’s losses to roughly 4% and wiping out last week’s gains.

The U.S. effort comes just as sanctions on Russian oil producers Rosneft and Lukoil take effect. While the market had been pricing in potential supply tightening, the possibility of negotiations between Kyiv and Moscow has tempered those expectations.

Ukrainian President Volodymyr Zelenskiy confirmed he is prepared to work with Washington on a possible plan, further pressuring bullish sentiment.

Oil Prices Projections Clouded by Uncertainty Around Russia Sanctions

Analysts caution that any peace arrangement remains far from guaranteed. ANZ noted that Kyiv has repeatedly rejected Moscow’s demands, keeping the timeline unpredictable.

At the same time, traders doubt the effectiveness of the newest round of U.S. restrictions on Rosneft and Lukoil, with Lukoil allowed until December 13 to offload its international portfolio.

Deutsche Bank’s Jim Reid said the combination of negotiations and new sanctions brought some relief to supply-risk concerns, but the market remains unsure of the true impact.

Stronger Dollar Weighs on Crude as Fed Expectations Shift

A strengthening U.S. dollar is adding another layer of pressure. The currency is on track for its strongest week in more than a month as traders pare back expectations for a Federal Reserve rate cut next month.

According to OANDA’s Kelvin Wong, CME FedWatch now shows only a 35% chance of a December rate cut, down sharply from roughly 90% a month earlier. A firmer dollar typically dampens crude buying interest from non-U.S. holders, reinforcing the day’s downside push.

Market Forecast: Short-Term Bias Remains Bearish

With WTI futures trading below the 61.8% retracement support and last week’s swing low, and with geopolitical developments and broader risk sentiment turning negative, the near-term outlook stays bearish.

Unless buyers reclaim $58.44 and $59.23 and mount a push toward the 50-day moving average at $60.52, the market appears positioned for a test of the $55.91 and $55.22 main bottoms.

More Information in our Economic Calendar.