Oil closes higher on expectations of US monetary easing

Oil drilling rigs

Oil prices rose on Thursday, supported by expectations of a Federal Reserve interest rate cut, while stalled peace talks in Ukraine limited the likelihood of Russian oil returning to global markets.

Brent crude futures for February delivery gained 0.94%, or $0.59, to $63.29 per barrel.

Meanwhile, WTI (Nymex) January futures rose 1.22%, or $0.72, to $59.67 per barrel.

Phil Flynn, senior analyst at Price Futures Group, told Reuters that expectations of a US rate cut outweigh all other factors, driving oil prices higher.

Rising tensions between the US and Venezuela also supported oil prices, amid concerns over potential disruptions to crude supplies from the Latin American country.

Additionally, the Russian government announced that a meeting held yesterday between President Vladimir Putin and the US special envoy on the Ukraine peace plan did not result in a mutual agreement.

Separately, sources told Reuters that Kazakhstan’s crude and condensate production fell 6% in the first two days of December, following a Ukrainian drone attack on the marine loading terminal of the Caspian Pipeline Consortium on the Black Sea.

A Reuters survey also indicated that OPEC’s crude oil output fell slightly by 30,000 barrels per day (bpd) in November, to 28.40 million bpd.