Oil Rises Slightly, Ukraine War & Peace Keep Market Uncertain
World oil prices edged higher in Thursday morning trading. Brent crude rose around 0.38% to around $62.91 per barrel, while US WTI rose 0.49% to around $59.24 per barrel. This increase was triggered by supply concerns following Ukraine's attack on Russian oil infrastructure, but the gains were restrained as the overall market was considered oversupplied and fundamentals were not yet strong.
On the supply side, Ukraine again attacked Russia's energy network, this time the Druzhba oil pipeline in the Tambov region, the fifth attack on a pipeline carrying Russian oil to Hungary and Slovakia. Although the pipeline operator and Hungarian energy companies said oil flows were still operating normally, the market viewed this series of attacks as a planned attempt to further disrupt Russian energy capacity. Consultancy Kpler noted that the drone campaign has pushed Russia's refining throughput down to around 5 million barrels per day in the September-November period, down around 335,000 barrels per day from a year ago. Gasoline production was hit hardest, followed by gasoil (diesel), adding to concerns about potential disruptions to finished product supplies.
Price sentiment was also influenced by news that the Ukraine-Russia peace talks had not yielded any significant breakthrough. US President Donald Trump's representatives left a meeting with the Kremlin without any concrete results on ending the war. Trump himself stated that the next steps were unclear. Previously, expectations of peace had pressured oil prices because the market imagined a scenario: war ends → sanctions are eased → Russian oil is freer to enter the already oversupplied global market. Now, with the peace process stalled, the scenario of a near-term Russian supply glut has been temporarily put on hold, providing some support for prices.
However, fundamentally, the oil market remains overshadowed by the issue of oversupply. Ratings agency Fitch cut its oil price assumptions for 2025–2027, believing global production growth could potentially outpace demand. This means that, despite geopolitical disruptions, the market remains relatively loose in the medium term: supplies are sufficient, production from several non-OPEC countries (such as the US) is likely high, and global economic growth is not particularly aggressive. This situation means that any price increases triggered by news of war tend to be limited and quickly "sold on rallies" by traders.
For next year, the direction of oil prices will likely be determined by the "tug-of-war" of two forces: geopolitics and fundamentals. On the one hand, as long as the Ukraine-Russia war remains unresolved and attacks on Russian energy facilities continue, the risk of supply disruptions remains a factor that could lift prices at any time. On the other hand, if the global economy slows and oil production continues to grow, oversupply pressure could keep oil within a relatively moderate range. Simply put, the scenario is this: as long as there is no major escalation that actually cuts off physical supply, oil prices are likely to move within a range and remain unsustainably high. For market participants, next year is more like a "trading range year" than a sharp uptrend, with any spikes due to conflict potentially exploited as profit-taking momentum. (asd)
Source: Newsmaker.id
