Oil Prices Crumble as Dollar Surges and Ukraine Peace Talks Emerge

WTI crude got hammered today—down 2.42% to hit a 1.5-week low, with RBOB gasoline sliding 3.06% to match. The culprit? A stronger dollar crushing energy valuations, plus fresh chatter that Trump’s camp is quietly cooking up a Ukraine peace deal with Russia.

What’s Pressuring Prices?

The latest EIA data was mixed at best. Crude inventories fell 3.43M barrels (bigger than expected), but gasoline stockpiles bloated by 2.3M barrels while distillates unexpectedly climbed 171K barrels. Translation: demand looks soft, supply fears are easing.

On the geopolitical side, Russia’s crude export game is getting wrecked. Vortexa’s data shows Russian oil shipments crashed to 1.7M bpd in early November—the lowest in 3+ years. Ukraine’s been systematically torching Russian refineries (13-20% of capacity knocked out), and new US/EU sanctions on Russian tankers aren’t helping Moscow’s export situation either.

Why Oil Still Has a Floor

But here’s the thing—Russia’s pain isn’t all downside for prices. OPEC+ is scrambling because the global oil market flipped from deficit to surplus. OPEC now forecasts a 500K bpd surplus in Q3 (vs. a -400K bpd deficit estimate last month), and the IEA is predicting a monster 4M bpd oversupply in 2026. That said, ongoing tensions—Iran grabbing tankers, threats against Venezuela, sanctions tightening Russia’s production—keep a safety net under prices.

The Real Story

US crude inventory sits 5% below the 5-year seasonal average, which is tighter than expected. Production ticked down slightly to 13.834M bpd after hitting a record 13.862M bpd last week. The rig count is climbing (417 active rigs now, up from a 4-year low of 410 in August), but still way down from the 627 rigs we saw in late 2022. OPEC+ is pumping harder (October hit 29.07M bpd, the highest in 2.5 years) to trim its 2.2M bpd production cuts, but they’re hitting an oversupply wall. The peace deal chatter + strong dollar combo is enough to keep crude under pressure for now.