Crude Erases Early Gains on a Possible Ukraine Peace Plan

Core Insights - Crude oil and gasoline prices experienced a decline after an initial rally, with gasoline reaching a two-week low [2] - The drop in crude prices was influenced by geopolitical developments, particularly the potential for a peace plan in Ukraine, which could lead to an easing of sanctions on Russian energy exports [4] - OPEC revised its Q3 global oil market estimates from a deficit to a surplus, indicating a shift in supply dynamics [7] Price Movements - December WTI crude oil closed down by $0.30 (-0.50%), while December RBOB gasoline fell by $0.0137 (-0.71%) [1] - Gasoline prices fell significantly, marking a two-week low, as crude prices faced downward pressure [2] Geopolitical Factors - Ukrainian President Zelenskiy's agreement to consider a US-Russia peace plan raised concerns about future sanctions on Russian oil, potentially increasing global oil supplies [4] - Continued geopolitical risks, including Iran's seizure of an oil tanker and US military actions regarding Venezuela, are providing underlying support for oil prices [6] Supply Dynamics - Russian crude exports have decreased, with Vortexa reporting a drop to 1.7 million barrels per day (bpd) in early November, the lowest in over three years [5] - Ukraine's military actions have targeted Russian refineries, reducing Russia's refining capacity by 13% to 20% and limiting crude production by up to 1.1 million bpd [5] OPEC and Production Estimates - OPEC's recent revision indicates a surplus of 500,000 bpd in global oil markets for Q3, contrasting with a previous estimate of a 400,000 bpd deficit [7] - The EIA has also increased its 2025 US crude production estimate to 13.59 million bpd, up from 13.53 million bpd [7]