Oil prices moved slightly lower on Tuesday in thin holiday trading, as investors closely monitored upcoming negotiations between the United States and Iran. Limited market participation across Asia kept volumes subdued, while a stronger U.S. dollar added pressure to crude prices ahead of key economic data and Federal Reserve signals later this week.
Brent crude futures for April delivery slipped 0.3% to $68.45 per barrel. Meanwhile, West Texas Intermediate (WTI) crude futures rose 1.1% to $63.45 per barrel by 21:00 ET (02:00 GMT), although the move was influenced by the U.S. market holiday on Monday.
Trading activity was notably muted due to public holidays in China, Hong Kong, Taiwan, South Korea, and Singapore, which reduced overall liquidity in energy markets.
US-Iran talks draw market attention amid rising tensions
U.S. and Iranian officials are scheduled to meet in Geneva, Switzerland, to discuss Tehran’s nuclear enrichment program, according to media reports. The talks come amid heightened geopolitical tensions in the Middle East.
President Donald Trump stated on Monday that he would be “indirectly involved” in the discussions, though he did not provide further details. The meeting follows earlier negotiations this month that ended without a clear breakthrough.
Reports also indicated that the United States deployed a second aircraft carrier to the region ahead of the talks, with Washington reportedly preparing contingency plans if diplomatic efforts fail. As a result, oil markets have incorporated a higher geopolitical risk premium, given the potential for supply disruptions in the Middle East.
Stronger US dollar pressures crude ahead of key data
Crude prices also faced headwinds from a firmer U.S. dollar. The greenback gained 0.2% against a basket of major currencies on Tuesday, supported by investor positioning ahead of several important U.S. economic releases.
Market participants are awaiting industrial production and trade data, as well as the Personal Consumption Expenditures (PCE) price index, which is the Federal Reserve’s preferred measure of inflation. The PCE report is expected to play a significant role in shaping expectations for future U.S. interest rate decisions.
Additionally, the minutes from the Federal Reserve’s January meeting are due later this week and could provide further clarity on the central bank’s monetary policy outlook.
Overall, oil markets remain sensitive to both geopolitical developments and U.S. economic signals, as traders assess the balance between supply risks and broader macroeconomic trends.
