• WTI gains to near $59.00 as Ukraine hits Russian oil facilities.
• Peace talks between the US and Russia to end the war in Ukraine failed to get a breakthrough.
• The Fed is expected to cut interest rates next week.

West Texas Intermediate (WTI) futures on NYMEX trade 0.25% higher to near 59.00 during the Asian trading session on Thursday. The Oil price gains as Ukraine’s attack on the Druzhba oil pipeline, situated in Russia’s central Tambov region that supplies energy products to Hungary and Slovakia, has raised supply concerns at times when Moscow’s major oil companies Rosneft and Lukoil are already facing the burden of sanctions.

Though the Oil price trades higher during Asian trading hours, it is still inside Wednesday’s trading range.

The Oil price rose on Wednesday as well after peace talks between top envoys of the United States (US) and Russia failed to make a breakthrough.

Trump said that special envoy Steve Witkoff and his son-in-law Jared Kushner had a “very good meeting” on Tuesday with Russian President Vladimir Putin. The Kremlin said Putin accepted some US proposals, although the meetings did not yield a breakthrough, CNN reported.

Going forward, the major trigger for the Oil price will be the monetary policy announcement by the Federal Reserve (Fed) next week, in which the US central bank is expected to cut interest rates by 25 basis points (bps) to 3.50%-3.75%.

According to the CME FedWatch tool, the probability of the Fed cutting interest rates by 25 basis points (bps) to 3.50%-3.75% in the December policy meeting is 89%.

This will be the third interest rate cut by the Fed in a row. Lower interest rates by the Fed bode well for the Oil demand outlook.