Crude prices extended gains into a second session on Thursday, December 4, with Brent crude futures rising 0.52% to $63 per barrel, while WTI crude futures gained nearly 1%, reaching the day’s high of $59.45 per barrel.

Prices strengthened following a period of sharp volatility after a fresh round of Ukrainian attacks on Russian oil supplies and stalled peace talks, which lowered expectations of restored Russian flows.

Ukraine hit the Druzhba oil pipeline in Russia’s central Tambov region, Reuters reported on Wednesday, citing Ukrainian military intelligence. This marked the fifth attack on the pipeline, which sends Russian oil to Hungary and Slovakia. However, the pipeline operator and Hungary’s oil and gas company later confirmed that supplies were moving through the pipeline as normal.

Meanwhile, U.S. President Donald Trump’s representatives emerged from peace talks with the Kremlin without any specific breakthroughs to end the war. Trump stated that it was unclear what would happen next.

Putin emphasized that Russia has no intention of engaging in conflict with Europe but warned of serious repercussions if Europe were to provoke one. Meanwhile, Trump reiterated that the U.S. plans to take action against drug cartels operating in Venezuela, raising concerns about potential supply disruptions.

Earlier, expectations of an end to the war had pressured prices lower, as traders anticipated that a deal could lift sanctions on Russia and allow Russian oil to return to an already oversupplied global market.

Still, gains were capped by weak demand and potential oversupply, reinforced by EIA data showing U.S. crude inventories rose by 574,000 barrels last week, alongside increases in gasoline and distillate stocks.

Fitch Ratings on Thursday cut its 2025-2027 oil price assumptions to reflect market oversupply and production growth that is expected to outstrip demand.

Brent price forecast

Brokerage firm Choice Institutional Equities expects OPEC+ to lose global market share as US shale producers, boosted by technological and efficiency gains, continue to produce profitably at lower prices. This is likely to push the market balancing level, previously around USD 60/b, lower, keeping oil prices subdued for a longer period.

By contrast, Saudi Arabia, with its low lifting costs, needs roughly USD 90/b to balance its fiscal deficit. While less carbon-intensive barrels from emerging economies were initially expected to dominate, the US has emerged as highly competitive.

The brokerage estimates Brent crude at USD 69/b for CY25, slightly above the year-to-date average of USD 68.5/b, and has revised the CY26 forecast down from USD 65/b to USD 61.5/b, reflecting higher US supply at lower prices, a gradual unwinding of OPEC+ production cuts, and the potential lifting of sanctions on Rosneft and Lukoil.

(With inputs from Reuters)

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