# Oil Bounces Back on Fed Rate-Cut Bets—But Peace Talks Could Be a Buzzkill

WTI crude just popped 1.26% to $58.79 on Monday, riding the coattails of Wall Street's optimism. Here's what's happening:

**The Bull Case**
Fed officials are signaling rate cuts are coming. NY Fed President John Williams flagged labor market weakness, and Governor Christopher Waller just backed a December cut. This sparked a stock market rally, which traders are reading as a green light for economic recovery and, more importantly, energy demand growth. Classic playbook: lower rates = stronger economy = more oil consumption.

**The Headwind Nobody's Talking About**
But here's the kicker—peace talks between Russia and Ukraine just shifted into high gear. The Trump administration dropped a 28-point proposal last week, and now both sides are "closing in on a revised and updated peace framework" (their words, not details though). If this actually sticks, you're looking at:

- Sanctions on Russian oil (Rosneft, Lukoil) could lift
- Massive crude supply flooding back into the market
- China, India, Turkey would stop hunting for alternative suppliers

That's deflationary pressure on oil prices. No wonder crude felt downward pressure despite the Fed optimism.

**The Math on Supply**
Russia-Ukraine war has been bleeding on for 1,360+ days. Both sides keep torching energy infrastructure. If the guns go quiet, that's potentially millions of barrels of suppressed supply suddenly back in play. Add OPEC+ planning to boost production anyway, plus a strong dollar weighing on commodity prices, and you've got a recipe for bearish sentiment.

**Bottom Line**
Oil caught a bid from macro tailwinds, but it's a tug-of-war between Fed hope and geopolitical wild cards. Watch those peace negotiations—any breakthrough could sink crude faster than you'd think.