Oil hovers near 2-week highs on expected US interest rate cut, geopolitical risk
Oil prices hovered at two-week highs on Monday as investors expect a likely U.S. Federal Reserve interest rate cut this week to lift economic growth and energy demand, while monitoring geopolitical risk that threatens Russian and Venezuelan supply.
Brent crude futures fell by 25 cents, or 0.4%, to $63.50 a barrel by 0922 GMT, while U.S. West Texas Intermediate crude was at $59.83, also down 25 cents, or 0.4%.
Both contracts closed Friday’s trading session at their highest levels since November 18.
"The market is in a wait-and-see mode" ahead of more news on U.S. interest rates and the Ukraine peace talks, said Tamas Varga, oil market analyst at PVM. "If there’s any kind of agreement reached in near future on Ukraine, then Russian oil exports should increase and put downward pressure on oil prices," he said.
Markets are pricing in an 84% chance of a quarter-point cut at the Fed meeting on Tuesday and Wednesday, LSEG data showed. However, board member comments indicate the meeting is likely to be one of the most divisive in years, intensifying investor focus on the bank’s policy direction and internal dynamics.
SLOW PROGRESS ON UKRAINE
In Europe, progress on Ukraine peace talks remains slow, with disputes over security guarantees for Kyiv and the status of Russian-occupied territory still unresolved. U.S. and Russian officials also have differing views on the peace proposal tabled by the administration of U.S. President Donald Trump.
Source: Reuters.com
