Oil Prices Decline Amid Ongoing Peace Talks and U.S. Interest Rate Expectations
Oil prices experienced a decline during Tuesday's trading session, continuing the negative momentum from Monday. Traders are closely watching developments in Ukraine's peace negotiations and are cautiously anticipating the U.S. Federal Reserve's upcoming interest rate decision.
Brent crude futures dropped by 0.2%, settling at $62.34 per barrel. Meanwhile, West Texas Intermediate (WTI) crude fell by 0.3% to $58.70 per barrel. This decrease follows significant losses from the previous day, when prices dipped after Iraq announced the resumption of production at the West Qurna 2 oil field, operated by Lukoil.
Commenting on market movements, Priyanka Sachdeva, a senior market analyst at Phillip Nova, stated: "The drop in Brent prices toward $62 aligns with the broader outlook for December." She added, "Concerns about potential unrest in Iraq have quickly faded, and the market has returned to its primary drivers: ample supply and cautious demand expectations," as reported by Reuters.
In geopolitical developments, Ukraine is set to present an updated peace plan to the United States following consultations that President Volodymyr Zelensky held in London with leaders from France, Germany, and the United Kingdom. Tim Waterer, a senior market analyst at KCM Trade, noted that "oil prices remain within a narrow trading range until the situation regarding peace talks becomes clearer." He clarified that "if talks collapse, oil prices could rise, but if progress is made and there is a chance to resume Russian supplies to the global energy market, prices are expected to fall."
Additionally, informed sources have indicated that the G7 and the European Union are considering new measures to increase pressure on Russia's oil revenues, including discussions about replacing the current price cap mechanism on Russian oil exports with a total ban on related maritime services.
In Washington, global markets are keenly awaiting the Federal Reserve's scheduled decision on monetary policy and interest rates, set for Wednesday. Market estimates indicate an 87% probability of a 25 basis point cut in the main interest rate, which is viewed as a key factor influencing investment trends and global energy demand expectations.
