Oil prices fall amid peace talks on the war in Ukraine and expectations of a US Fed decision
Kyiv • UNN
Oil prices fell on Tuesday after a 2% drop the previous day. Brent futures fell to $62.41 a barrel, and WTI to $58.75.
Oil prices fell slightly on Tuesday, extending losses from a 2% drop in the previous session, with markets closely watching peace talks to end Russia's war in Ukraine and the upcoming US interest rate decision, UNN reports with reference to Reuters.
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Brent crude futures fell 8 cents, or 0.1%, to $62.41 a barrel at 04:09 GMT (06:09 Kyiv time). US West Texas Intermediate crude was at $58.75, down 13 cents, or 0.2%.
Both contracts fell more than $1 a barrel on Monday after Iraq resumed production at Lukoil's West Qurna 2 oilfield, one of the world's largest.
"The return of Brent oil prices to $62 is smoothly consistent with the broader December situation," said Priyanka Sachdeva, senior market analyst at Phillip Nova. "The noise around potential disruptions in Iraq subsided overnight, and the market quickly returned to its main theme – sufficient supply and cautious demand expectations."
Ukraine will share a revised peace plan with the US after talks in London between President Volodymyr Zelenskyy and the leaders of France, Germany, and the United Kingdom, the publication writes.
"Oil is holding in a narrow trading range until we get a better idea of which way the peace talks will go," said KCM Trade chief market analyst Tim Waterer.
"If the talks break down, we expect oil prices to rise, or if progress is made and there is a possibility of Russia's supplies returning to the global energy market, prices are expected to fall," he added.
According to sources familiar with the matter, the Group of Seven countries and the European Union are negotiating to replace the price cap on Russian oil exports with a full ban on maritime transportation to reduce Russia's oil revenues.
Also on the radar is the Federal Reserve's policy decision, due on Wednesday, with markets pricing in an 87% chance of a quarter-point rate cut.
Lower interest rates are typically a positive for oil demand, given the reduced cost of borrowing, although some analysts have been cautious about how much this might impact oil prices at this point.
"While markets are largely interested in the Fed's upcoming policy decision on Wednesday regarding a possible 25 basis point cut, which could provide short-term support to the lower end of the $60-65 range, the broader price structure remains anchored by expectations of an oversupplied (oil market) in 2026," said Sachdeva of Phillip Nova.