Peace Talks in Crisis: Oil Prices on the Rise

Tensed Atmosphere in Oil Markets

Brent crude oil price increased by %0.2 as of 09:37 today, reaching 61.34 dollars. At the same time, West Texas Intermediate (WTI) crude oil is being traded at 57.89 dollars per barrel. As of today, Brent crude oil's price closed at 61.23 dollars, following a peak of 61.68 dollars yesterday.

Peace Negotiations at Risk

The rise in oil prices is attributed to Russia accusing Ukraine of attacking President Vladimir Putin's residence with drones. This situation has raised concerns that peace negotiations between the two countries could be jeopardized, leading to unease in the markets. Russian Foreign Minister Sergey Lavrov stated regarding the attack, "Russia's approach to negotiations will be reassessed, considering the Kiev regime's definitive shift to state terrorism policy." Meanwhile, Ukrainian President Volodymyr Zelensky denied these allegations.

Factors Supporting Oil Prices

Russia's signals of retaliation and the increasing uncertainty in negotiations are heightening supply concerns along the Russia-Ukraine border, thereby supporting oil prices. Additionally, strong expectations for interest rate cuts from the Federal Reserve (Fed) for the upcoming year continue in the markets. Throughout the year, the Fed has lowered the policy rate by a total of 75 basis points, bringing it to the range of %3.50-3.75.

Infrastructure and Economic Uncertainties

In recent months, the Fed capped the year with 25 basis point cuts in September, October, and December, and it is anticipated that two additional rate cuts are planned for 2024. However, the uncertainty regarding who will be appointed to replace Fed Chairman Jerome Powell at the end of his term and the monetary policy to be followed is causing a cautious stance in the market. This situation, coupled with an increased perception of political pressure, is limiting the rise in prices.

Technical Analysis and Outlook

From a technical perspective, 62.50 dollars is being watched as a resistance level for Brent crude oil, while 52.50 dollars stands out as a support level. Developments in the markets and geopolitical risks will continue to play an active role in pricing in the coming days.