Key Moments
- Brent crude futures traded at $62.42 a barrel and U.S. WTI at $58.75, both extending the prior session’s losses.
- Traders monitored Ukraine peace efforts and potential changes to Western restrictions on Russian oil exports.
- Market participants focused on the upcoming IEA December report and a U.S. Federal Reserve policy decision that could include a 25bp rate cut.
Oil Prices Extend Previous Session’s Declines
Oil benchmarks drifted lower on Tuesday. This move added to the more than 2% slide from the prior session. Traders continued evaluating geopolitical developments, supply signals, and an impending U.S. interest rate decision.
By 0717 GMT, Brent crude futures dipped 7 cents, or 0.1%, to $62.42 per barrel. U.S. West Texas Intermediate (WTI) crude eased 13 cents, or 0.2%, to $58.75 per barrel.
Both contracts had dropped by more than $1 a barrel on Monday. The decline followed Iraq’s resumption of production at Lukoil’s West Qurna 2 field, which is considered one of the largest oilfields in the world.
Market Snapshot
| Contract | Price | Move | Percentage Change | Time (GMT) |
|---|---|---|---|---|
| Brent crude futures | $62.42 | – $0.07 | – 0.1% | 0717 |
| WTI crude | $58.75 | – $0.13 | – 0.2% | 0717 |
Ukraine Peace Efforts and Russian Oil Flows Under Scrutiny
Traders closely tracked diplomacy around Russia’s war in Ukraine. Ukraine planned to present a revised peace proposal to the United States after talks in London. These discussions involved President Volodymyr Zelenskiy and the leaders of France, Germany, and Britain.
“Oil is keeping to a tight trading range until we get a better idea of which way the peace talks will go,” KCM Trade chief market analyst Tim Waterer said.
“If the talks break down, we expect oil to move higher, or if progress is made, and there is a likelihood of Russian supply to the global energy market resuming, prices would be expected to drop,” he added.
At the same time, sources familiar with the matter said that the Group of Seven nations and the European Union were discussing a shift in their approach. They are considering replacing the current price cap on Russian oil exports with a full maritime services ban. This move would aim to further constrain Russia’s oil revenues.
Supply Outlook and IEA December Report in Focus
Analysts also looked ahead to the International Energy Agency’s upcoming monthly oil market report for December, scheduled for release on 11 December, for fresh guidance on supply trends.
“The next (market) driver is likely to be the IEA monthly oil market report for December, released on 11 December, which it has predicted a record surplus in the oil market in 2026, highlighted in previous outlook reports,” said OANDA senior market analyst Kelvin Wong.
Wong noted that if the IEA reiterates concerns about a potential surplus in its December publication, WTI prices could face additional pressure.
If the IEA continues to flag surplus risk in the oil market in its December report, WTI crude could drift downwards to test the range support zone at $56.80 to $57.50 a barrel, he added.
Fed Rate Decision and Demand Expectations
Another key catalyst on traders’ radar was the U.S. Federal Reserve’s policy announcement due on Wednesday, with market pricing indicating an 87% chance of a 25 basis point rate cut.
Lower borrowing costs are typically viewed as supportive for oil consumption, but some analysts questioned how much immediate influence the Fed’s move might have on crude prices in the current environment.
“Although markets are largely invested in upcoming FED policy decision on Wednesday for a possible 25bp cut, something that could lend short-term support at the lower end of the $60–65 band, the broader price structure remains anchored by expectations of an oversupplied 2026 (oil market),” said Phillip Nova’s senior market analyst Priyanka Sachdeva.
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