Oil prices softened during Tuesday's Asian session, extending the previous day’s 2% slide, as traders weighed geopolitical developments surrounding Russia’s war in Ukraine alongside expectations for an imminent United States interest rate cut.
By 3:30 pm AEDT (4:30 am GMT), Brent crude futures were down 8 cents, or 0.1%, at $62.41 a barrel, while U.S. West Texas Intermediate crude slipped 12 cents, or 0.2%, to $58.76.
The modest pullback followed Monday’s sharper drop, which came after Iraq reportedly restored output at Lukoil’s West Qurna 2 oilfield, easing concerns over supply constraints.
Geopolitics remained a central driver of sentiment, with Ukraine preparing to present a revised peace proposal to the United States after President Volodymyr Zelenskyy met the leaders of France, Germany and Britain in London.
Reuters reported that, according to sources familiar with the discussions, the G7 and the European Union are also considering replacing the current price cap on Russian oil with a full maritime services ban, a move designed to further choke Moscow’s energy revenues.
Traders were equally focused on the U.S. Federal Reserve, which announces its policy decision on Wednesday.
Market pricing reflects an 89.4% probability of a quarter-point rate cut, according to the CME Group FedWatch Tool
