Oil prices edge lower ahead of Fed meet; Ukraine peace talks in focus
Oil prices edged lower Tuesday, adding to the previous session’s sharp losses as traders digested renewed supply from Iraq and developments in Ukraine peace efforts ahead of the last Federal Reserve meeting of the year.
At 04:40 ET (09:40 GMT), Brent Oil Futures expiring in February ticked down 0.3% to $62.30 per barrel and West Texas Intermediate (WTI) crude futures fell 0.3% to $58.68 per barrel.
Both contracts slipped 2% on Monday after Iraq’s move to restore production at the West Qurna-2 oilfield, one of the largest in the world and a site that represents a meaningful share of national exports.
Ukraine peace talks in spotlight
Traders remain focused on the Ukraine-Russia conflict, with Ukraine signaling it will present a revised peace proposal to the U.S. after talks in London between President Volodymyr Zelenskiy and leaders of France, Germany, and Britain.
The prospect of progress toward a negotiated settlement could remove part of the geopolitical risk premium embedded in crude prices. A potential deal could also revive Russian oil flows more freely into global markets, which may exert additional downward pressure.
However, a compromise to end the war may still prove to be hard to find with Zelenskiy saying there was still no agreement on the issue of giving up territory - which Moscow has pushed for.
Fed rate decision in focus
Markets are also awaiting the start of the two-day Federal Reserve meeting later on Tuesday.
Investors widely expect an interest rate cut to be announced on Wednesday, which could bolster demand prospects by lowering borrowing costs and supporting fuel consumption.
"The mood of the Americans, in principle, is for finding a compromise," he said. "Of course, there are complex issues related to the territory, and a compromise has not yet been found there."
Source: Investing.com
