Barclays analyst on whether the Russia-Ukraine peace deal will impact oil prices

Core Viewpoint - Oil prices are declining as the US seeks to negotiate a peace deal between Russia and Ukraine, but geopolitical volatility continues to impact the market [1][2]. Oil Production and Supply - Russia's crude oil production has remained flat to slightly down this year, despite OPEC+ increasing production targets, indicating that Russia is operating close to capacity [3][4]. - Even with a potential ceasefire and sanctions relief, it is unlikely that Russia will significantly increase oil production [4][5]. Refining Margins - Recent attacks on Russian refinery infrastructure have boosted refining margins, but a ceasefire could lead to a decrease in these margins if attacks pause [6]. Demand Dynamics - China's oil demand has increased by 400,000 barrels per day in the first ten months of the year, surpassing the forecast of 280,000 barrels per day for the full year, driven by strong industrial activity despite the rise of electric vehicles (EVs) [7][8]. Price Forecasts - The company projects a surplus of 1.7% in oil balances for next year, with a forecasted average price of $66 per barrel for Brent crude, which is only slightly above the current forward curve price of $62 per barrel [10][11].