Oil prices slipped again on Tuesday, adding to the sharp decline seen at the start of the week, as traders monitored developments in Ukraine peace negotiations, ongoing concerns about global oversupply, and the upcoming U.S. interest rate decision.
By 0717 GMT, Brent crude futures were down 7 cents, or 0.1%, at $62.42 a barrel, while U.S. West Texas Intermediate dipped 13 cents, or 0.2%, to $58.75.
Monday’s losses — more than $1 per barrel — followed Iraq’s move to restore output at Lukoil’s massive West Qurna-2 field, one of the largest oil-producing sites globally.
Ukraine plans to present a revised peace framework to Washington after discussions in London between President Volodymyr Zelenskiy and leaders from France, Germany, and the U.K.
Tim Waterer, chief market analyst at KCM Trade, noted the market’s hesitancy: “Oil is keeping to a tight trading range until we get a better idea of which way the peace talks will go.”
He added: “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.”
Sources familiar with ongoing discussions said G7 nations and the European Union are weighing a shift from a price cap on Russian oil exports to a full maritime services ban to further curb Moscow’s revenue.
Another potential catalyst is due next week, as analysts look toward December’s monthly oil market report from the International Energy Agency.
Kelvin Wong, senior market analyst at OANDA, said: “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.” He noted that if the IEA reiterates these surplus concerns, WTI could slip toward the $56.80–$57.50 support range.
Attention is also turning to Wednesday’s Federal Reserve meeting, where markets currently assign an 87% chance of a 25-basis-point rate cut.
While lower borrowing costs typically bolster oil demand, analysts warn that broader price action remains heavily influenced by expectations of oversupply.
Priyanka Sachdeva, senior market analyst at Phillip Nova, remarked: “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).”
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