• Russia-Ukraine tensions and rising US crude stocks have impacted international oil prices.
• Brent crude futures and US West Texas Intermediate crude futures showed marginal changes.
• Geopolitical risks reintroduced by the Russia-Ukraine conflict have kept a floor under prices.
• US Federal Reserve's expected interest rate trim and the expiration of WTI's December contract also influenced the oil market.

The escalating tensions between Russia and Ukraine have had a significant impact on international crude oil prices, which remained steady on November 20. The conflict, involving major oil producer Russia, has counterbalanced the rise in US crude and gasoline stocks. The oil market has been receiving mixed signals from these two conflicts, leading to uncertainty about the prospect of a supply surplus in the coming year.

Brent crude futures for January were marginally down by four cents, or 0.05 per cent, at $73.27 a barrel. US West Texas Intermediate crude futures for December, due to expire on Wednesday, were up 26 cents, or 0.37 per cent, at $69.65. The more active WTI contract for January was last up two cents, or 0.03 per cent, at $69.26. In India, crude oil futures last traded 0.56 per cent lower at ₹5,825 per barrel on the multi commodity exchange (MCX).

Several factors are influencing the crude oil prices. US crude stocks and gasoline inventories rose, while distillate stockpiles fell in the week ending November 15, according to the Energy Information Administration (EIA). Crude inventories rose by 545,000 barrels to 430.3 million barrels, compared to analysts' expectations for a 138,000-barrel rise. US gasoline stocks rose by 2.1 million barrels to 208.9 million barrels, compared to analysts' expectations for a 900,000-barrel build.

Geopolitical Tensions and Oil Prices

The escalating war between Russia and Ukraine has kept a floor under prices this week, reintroducing geopolitical risk into the market. However, concerns over additional sanctions or disruptions of Russian fuel or crude oil supplies appear misguided due to strong Russian fuel exports.

Norway's Equinor announced on Wednesday that it had restored full output capacity at the Johan Sverdrup oilfield in the North Sea following a power outage. The field was producing at peak capacity of around 755,000 barrels of crude oil equivalent per day.

Hezbollah chief Naim Qassem stated in a televised speech that his group had reviewed and given feedback on a US-drafted ceasefire proposal to end fighting with Israel, and that a halt to hostilities was now in Israel's hands. This development has also influenced oil prices.

Impact of US Policies on Oil Market

Meanwhile, the US Federal Reserve is expected to trim interest rates next month but make shallower cuts in 2025 than expected just a month ago due to the risk of higher inflation from President-elect Donald Trump's proposed policies, according to most economists in a Reuters poll. Higher interest rates increase the cost of borrowing, which can slow economic activity and dampen demand for oil.

The expiration of WTI's December contract on Wednesday also contributed to choppy trading. Key support levels for crude oil stand at $68.85-68.10, with resistance at $69.95-70.55. In INR terms, crude oil has support at ₹5,770-5,700 and resistance at ₹5,890-5,940, said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

In related news, the U.S. dollar rose on Wednesday, renewing its post-election rally after a three-session decline as investors looked for more insight on the Federal Reserve's interest rate plans and U.S. President-elect Donald Trump's proposed policies. Safe-haven currencies such as the Japanese yen, Swiss franc and the greenback saw a brief boost on Tuesday before fading.

Russia's foreign minister Sergei Lavrov said that country would "do everything possible" to avoid nuclear war, hours after an announcement by Moscow to lower its threshold for a nuclear strike provided them with a bid.