Oil prices held near two-week highs during Asian trade on Monday as investors positioned for a possible interest rate cut by the United States Federal Reserve this week, while geopolitical tensions continued to cloud the supply outlook for both Russia and Venezuela.
By 3:25 pm AEDT (4:25 am GMT), Brent crude futures edged up 12 cents, or 0.2%, to US$63.87 per barrel, while U.S. West Texas Intermediate crude rose by the same amount to US$60.20.
Both benchmarks finished Friday’s session at their strongest levels since 20 November.
Traders have largely priced in a policy shift at the Fed’s upcoming meeting, with markets assigning an 84% chance of a quarter-point cut, according to the CME Group FedWatch Tool.
Yet commentary from board members suggests the gathering could be one of the most divided in years, sharpening focus on how policymakers balance slowing hiring against persistent inflation pressures.
In Europe, efforts to broker peace in Ukraine remain sluggish. Key disputes persist over security guarantees for Kyiv and the future of Russian-occupied territory, while Washington and Moscow continue to hold differing views on a U.S. proposal put forward by the administration of U.S. President Donald Trump.
ANZ analysts wrote that “for the moment, an agreement looks distant”, noting Ukraine’s claim of responsibility for strikes on Russia’s Syzran refinery and the Temryuk seaport over the weekend.
They added that “the various potential outcomes from Trump's latest push to end the war could release a swing in oil supply of more than 2 million barrels per day”.
Simultaneously, the Group of Seven nations and the European Union are discussing replacing the existing price cap on Russian crude with a full maritime services ban, Reuters reported, a shift that could significantly restrict exports from the world’s second-largest oil producer.
U.S. pressure on Venezuela - a member of the Organization of the Petroleum Exporting Countries - has also intensified.
Recent actions include strikes on vessels Washington said were involved in drug-smuggling operations, as well as renewed discussion of potential military steps aimed at removing President Nicolas Maduro.
