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Oil prices dipped on Tuesday, extending the previous session’s more than 2% slide, as traders monitored geopolitical developments, ample supply signals, and the Federal Reserve’s upcoming policy decision.
Brent crude futures slipped 7 cents, or 0.1%, to $62.42 a barrel, while U.S. West Texas Intermediate (WTI) fell 13 cents, or 0.2%, to $58.75 as of 07:17 GMT.
Monday’s decline followed Iraq’s restoration of production at Lukoil’s West Qurna-2 field, one of the world’s largest, adding to concerns over increasing supply.
Markets Track Ukraine Peace Efforts
Sentiment remained cautious as Ukraine prepared to present a revised peace plan to the U.S. after talks in London between President Volodymyr Zelenskiy and the leaders of France, Germany and the U.K.
“Oil is keeping to a tight trading range until we get a better idea of which way the peace talks will go,” said Tim Waterer, chief market analyst at KCM Trade.
A breakdown in negotiations could push prices higher, he added, while progress toward a settlement — especially one that allows Russian supply to return more freely to global markets — could add downward pressure.
Meanwhile, the Group of Seven and the European Union are reportedly discussing replacing the current price cap on Russian oil with a full maritime services ban, a move aimed at curbing Moscow’s energy revenues.
Supply Outlook Hinges on IEA Report
Analysts also pointed to the upcoming International Energy Agency (IEA) monthly report, due December 11, as a key catalyst.
“The next market driver is likely to be the IEA report, which has previously highlighted expectations for a record oil surplus in 2026,” said Kelvin Wong, senior market analyst at OANDA.
Should the IEA continue to flag surplus risks, Wong noted that WTI could drift toward support at $56.80–$57.50 per barrel.
Fed Rate Cut Expectations Add a Secondary Influence
Markets are also bracing for the Federal Reserve’s decision on Wednesday, with traders pricing in an 87% chance of a 25-basis-point rate cut.
Lower interest rates typically support oil demand by easing borrowing costs, but analysts suggested the near-term impact on crude prices may be limited given overriding geopolitical and supply factors.
