Oil prices steadied on Tuesday after dropping 2% in the previous trading session. Investors continued to watch developments in Ukraine peace talks, concerns about strong global supply, and the upcoming U.S. interest rate decision.
By 13:17 GMT, Brent crude futures inched up 3 cents to $62.52 per barrel. U.S. West Texas Intermediate crude also rose 4 cents, trading at $58.92 per barrel.
Both benchmarks had fallen more than $1 on Monday after Iraq restored operations at Lukoil’s West Qurna 2 oilfield, one of the largest in the world.
Ukraine is preparing to share a revised peace proposal with the United States following talks in London between President Volodymyr Zelenskiy and the leaders of France, Germany and Britain.
KCM Trade’s chief market analyst Tim Waterer noted that oil remained stuck in a narrow range as traders waited for clearer signals from the peace discussions. He added that a breakdown in talks could lift prices, while progress might push them lower if Russian supply returns to the global market.
Sources familiar with ongoing negotiations said that the Group of Seven nations and the European Union are considering replacing the current price cap on Russian oil with a full maritime services ban in an effort to curb Moscow’s energy revenues.
Some analysts are also watching for supply insights in the upcoming International Energy Agency (IEA) report.
Focus turns to IEA report and the Fed meeting
OANDA senior market analyst Kelvin Wong said the next key driver will likely be the IEA’s December monthly report, due on 11 December. Earlier outlooks from the agency flagged a potential record supply surplus in 2026. If the IEA continues to highlight surplus risks, Wong suggested that WTI crude may drift lower and retest the support zone between $56.80 and $57.50 per barrel.
SEB chief commodities analyst Bjarne Schieldrop added that Brent is being pushed toward the $60 level due to high volumes of oil stored at sea. He noted that U.S. sanctions on Rosneft and Lukoil have likely prevented an even steeper decline in prices.
Markets are also awaiting the U.S. Federal Reserve decision on Wednesday. Current pricing shows an 87% chance of a 25-basis-point rate cut. While lower rates can support oil demand by easing borrowing costs, some analysts remain cautious about the short-term impact on crude prices.
Phillip Nova senior market analyst Priyanka Sachdeva said that even though the expected rate cut may offer short-term support within the $60–65 range, the broader outlook remains constrained by expectations of an oversupplied market in 2026.
