Noor Trends News, Technical Analysis, Educational Tools and Recommendations
West Texas Intermediate (WTI) crude oil prices declined in Tuesday’s Asian trading session, trading near the $58.65 per barrel level. This retreat was driven by cautious optimism regarding the prospects of reaching a peace plan between Ukraine and Russia to end the three-year war.
The US peace proposal aimed at ending the Russia-Ukraine conflict is directly influencing oil prices, as prices tend to fall when geopolitical risks subside. Although Ukrainian President Volodymyr Zelenskyy indicated on Monday that negotiations have reached a “critical moment,” signifying the difficulty of discussions surrounding territorial and sovereignty issues, the market anticipates a move toward de-escalation.
Observers suggest that markets should expect a “nervous oil market” ahead of the Thanksgiving holiday, noting that “several factors point to a peace agreement or possibly a ceasefire moving closer over the weekend, which supports further price declines this week.”
US Rate Cut Expectations Offer Support
Conversely, rising expectations for a US interest rate cut in December may help limit WTI’s losses. Generally, lower interest rates tend to weaken the US Dollar (USD), which makes USD-denominated commodities, such as oil, cheaper for foreign buyers and thus increases their attractiveness.
The probability of the Federal Reserve cutting interest rates next month surged to 80% on Tuesday, according to the CME FedWatch Tool, after having dropped to just 30% in the previous week. This rise followed statements made by a Federal Reserve Governor on Monday, who indicated that available data suggests the labor market remains weak enough to warrant another quarter-point cut.
Anticipation for Inventory Reports
Oil traders are awaiting the release of the weekly report from the American Petroleum Institute (API) on crude oil stocks, due later on Tuesday, which will provide a vital indicator of supply and demand levels in the market.
