Oil Stabilizes After Plunging to One-Month Low

Oil prices bounced back slightly on Wednesday after hitting their lowest point in a month, as markets weighed signs that Ukraine and Russia might be getting closer to a peace deal. But the recovery was modest, with both major oil benchmarks gaining less than half a percent.

Brent crude futures rose 19 cents to $62.67 per barrel by 0114 GMT, while West Texas Intermediate climbed 14 cents to $58.09. The gains came after Tuesday's sharp selloff that pushed prices to month-long lows.

Here's what's driving the market: any real progress toward ending the Ukraine-Russia conflict would ease concerns about supply disruptions from one of the world's major oil-producing regions. Russia is a key global energy supplier, and the ongoing war has kept risk premiums built into oil prices for months.

But there's another factor helping prices today. Markets are betting the Federal Reserve will cut interest rates again in December. Lower rates typically boost economic growth and increase demand for oil. When borrowing gets cheaper, businesses expand and consumers spend more, which means more fuel consumption.

The oil market is caught between two opposing forces right now. Peace talks suggest less geopolitical risk, which normally pushes prices down. But expectations of Fed rate cuts point to stronger economic activity ahead, which supports higher prices.

For traders, this creates a tricky environment. The modest gains today show the market isn't sure which direction to go. If peace talks advance quickly, we could see further pressure on prices as war premiums disappear. But if the U.S. economy picks up steam from lower rates, that could offset some of the downside.