Oil Markets Lackluster Amid Russia Peace Deal, China’s Stockpiling

Market Sentiment - Oil market sentiment remains overwhelmingly negative due to perceived oversupply and negative global demand indicators [1] - Brent crude for January delivery is trading at $63.10 per barrel, showing little change from $62.97 a week ago, while WTI contract increased slightly to $58.70 from $58.46 [1] - The recent rally in oil product prices has cooled off, with ICE Gasoil-Brent crack dropping from a peak of $35.84 per barrel on November 18 to approximately $26 per barrel [1] Supply-Side Focus - Market focus is on the supply side, with potential easing of U.S. sanctions on Russian producers if a ceasefire in Ukraine is achieved [2] - The Trump administration has proposed a new 19-point peace plan that is more favorable to Ukraine, including no handover of the Donbas region to Russia and provisions for U.S. intervention if Russia invades Ukraine [2] China's Crude Imports - China remains the leading buyer of Russian crude, with imports increasing by 275.6 thousand barrels per day over the past two months to approximately 2.15 million barrels per day [3] - Overall, China's crude imports have risen by 866 thousand barrels per day year-over-year to 11.44 million barrels per day, driven by strategic concerns and low oil prices [3] - Rystad Energy estimates that China has stockpiled over 1 million barrels of crude per day in some months, accumulating nearly 160 million barrels in the first nine months of 2025 [3] - China is expected to continue stockpiling crude oil at least through 2026, supported by new laws and infrastructure development, although the pace may slow as storage limits are reached [3] U.S. Intervention in Venezuela - Potential U.S. intervention in Venezuela has contributed to bearish sentiment, with the Trump administration designating Cartel de los Soles as a foreign terrorist organization [4] - U.S. Operation Southern Spear targets boats suspected of drug trafficking, linking these actions to Venezuela's significant oil reserves of 303 billion barrels, the largest globally [4]