Oil prices fluctuated at a two-week high on Monday as investors awaited a likely interest rate cut by the US Federal Reserve this week to stimulate economic growth and energy demand, while monitoring geopolitical risks threatening supplies from Russia and Venezuela, Reuters reports, writes UNN.
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By 03:21 GMT (05:21 Kyiv time), Brent crude futures rose 9 cents, or 0.14%, to $63.84 per barrel. US West Texas Intermediate crude futures traded at $60.16, up 8 cents, or 0.13%.
Both contracts closed Friday at their highest levels since November 18.
LSEG data showed that markets are pricing in an 84% chance of a quarter-point rate cut at the Fed's Tuesday and Wednesday meeting. However, comments from board members indicate that the meeting is likely to be one of the most contentious in recent years, intensifying investor focus on the direction of US central bank policy and internal dynamics.
In Europe, progress in peace talks on Ukraine remains slow, as disputes over security guarantees for Ukraine and the status of Russian-occupied territories remain unresolved, the publication writes. US and Russian officials also disagree on a peace proposal submitted by the administration of US President Donald Trump, the publication notes.
"The various possible outcomes of Trump's latest efforts to end the war could lead to fluctuations in oil supply of more than 2 million barrels per day," ANZ analysts said in a client note.
Commonwealth Bank of Australia analyst Vivek Dhar noted that a ceasefire is a major downside risk factor for oil prices, while permanent damage to Russian oil infrastructure is a significant upside risk factor.
"We believe that fears of oversupply will eventually materialize, especially as Russian oil and refined product supplies circumvent existing sanctions, contributing to a gradual approach of futures to the $60 per barrel mark by 2026," Dhar said.
Meanwhile, sources familiar with the situation said that G7 countries and the European Union are negotiating to replace the price cap on Russian oil exports with a full ban on sea transportation. This is likely to further restrict supplies from the world's second-largest oil producer.
The US has also increased pressure on OPEC member Venezuela, including striking vessels that it claims were attempting to smuggle illicit drugs from the OPEC member country, and there are also talks of military action to overthrow President Nicolas Maduro, the publication writes.
According to trading sources and analysts, independent Chinese refineries have increased purchases of sanctioned Iranian oil from onshore storage, using recently issued import quotas, which has helped reduce oversupply.