Oil prices inched lower on Tuesday, extending losses after a 2% decline in the previous session. Markets remained focused on ongoing peace efforts to end Russia’s war in Ukraine, concerns about ample global supply, and the upcoming U.S. interest rate decision.
Brent crude futures slipped 7 cents, or 0.1%, to $62.42 a barrel at 07:17 GMT. U.S. West Texas Intermediate crude fell 13 cents, or 0.2%, to $58.75 a barrel.
Both benchmarks dropped more than $1 on Monday after Iraq restored output at Lukoil’s West Qurna 2 field, one of the world’s largest oil-producing sites.
Ukraine is set to present a revised peace plan to the United States following talks in London between President Volodymyr Zelenskiy and leaders from France, Germany, and the United Kingdom.
According to Tim Waterer, chief market analyst at KCM Trade, oil prices are likely to remain within a narrow range until markets gain clearer direction from the peace negotiations. He noted that a breakdown in talks could push prices higher, while meaningful progress could lead to a further decline if Russian supply eventually returns to the market.
Sources familiar with the matter said the Group of Seven nations and the European Union are discussing replacing the current price cap on Russian oil exports with a full maritime services ban in an effort to further restrict Moscow’s revenues.
Analysts are also watching for developments in the International Energy Agency’s next monthly report. OANDA senior market analyst Kelvin Wong said the December report, due on December 11, may highlight a potential record surplus in the oil market for 2026. If the IEA continues to signal oversupply risks, Wong said WTI prices could slide toward the support range of $56.80 to $57.50 a barrel.
Another key focus for traders is the Federal Reserve’s policy announcement on Wednesday. Markets currently assign an 87% probability to a 25-basis-point rate cut. While lower interest rates generally support oil demand by reducing borrowing costs, analysts warned that the broader market outlook may limit any short-term price boost.
Priyanka Sachdeva, senior market analyst at Phillip Nova, said that even if the Fed delivers a quarter-point cut, oil prices are likely to remain anchored within the $60–$65 range due to expectations of an oversupplied market heading into 2026.
