**Oil Prices and The Federal Reserve** WTI Crude Oil prices have increased slightly, showing a 0.50% gain for the day. Investors are closely watching peace talks between Russia and Ukraine. Attention is also on the upcoming OPEC+ meeting, where a continuation of the production freeze into early 2026 is expected. Russian President Vladimir Putin and US President Trump are discussing issues that may help create a future security agreement. Ukrainian and US officials are meeting to strengthen ongoing security discussions in Geneva. Oil prices are getting additional support from the expected rate cut by the Federal Reserve in December. The market now thinks there is an 87% chance of a 25-basis-point cut, a significant jump from last week. WTI is a type of US oil known for its low gravity and low sulfur content, mostly traded from the Cushing hub. It serves as a benchmark for the global oil market, with its price affected by supply and demand, the US Dollar’s value, and OPEC decisions. Weekly oil inventory reports from the API and EIA also impact WTI prices, with decreasing inventories usually pushing prices up. OPEC’s production decisions during its biannual meetings directly affect oil prices. **OPEC Meeting and Market Strategy** WTI crude oil is currently trading around $59.30, putting the market at a critical point as we approach December. The upcoming OPEC+ meeting this Sunday is important and will likely set short-term price levels. We expect the group to keep its production freeze, which should provide stability and prevent a sharp price drop. The ongoing peace talks between Russia and Ukraine bring notable volatility, presenting both risks and opportunities for traders. We remember prices spiking over $120 a barrel back in 2022; any breakdown in negotiations could lead to a sudden price increase. On the other hand, a successful peace deal could drive prices down, making protective put options or straddle strategies—profiting from significant price changes in either direction—worth considering. Additionally, the strong expectation for a Federal Reserve rate cut in December is a key factor supporting prices. With markets anticipating an 87% chance of a cut, the US Dollar is likely to weaken, making oil cheaper for international buyers. Historically, a 5% drop in the Dollar Index has led to a 10-15% increase in oil prices. The OPEC+ decision to maintain steady production should serve as a support level. OPEC+ members have consistently adhered to their quotas throughout 2025, indicating a strong commitment to market stability. This backdrop makes selling out-of-the-money put options an appealing strategy for traders aiming to earn premium while betting that prices won’t drop significantly below current levels. Recent IEA data showed global oil demand growing by a modest 1.1 million barrels per day this year, suggesting the current low prices already reflect a slowdown. As long as peace talks don’t lead to a sudden influx of Russian supply, we see more potential for price increases than risks of decreases. A bull call spread could allow traders to prepare for a possible rally towards the mid-$60s while managing their risk ahead of these critical events. Create your live VT Markets account and start trading now.

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