Oil prices remained at two-week highs on Monday as investors anticipate a Federal Reserve interest rate cut this week, which is expected to bolster economic growth and energy demand. Concurrently, they are monitoring geopolitical risks that pose a threat to oil supplies from Russia and Venezuela. Brent crude futures experienced an increase of 4 cents, equivalent to 0.06%, reaching $63.79 per barrel by 0008. Meanwhile, U.S. West Texas Intermediate crude stood at $60.15 per barrel, reflecting a rise of 7 cents, or 0.12%. Both contracts concluded Friday’s session at their peak levels since November 18. Market participants are assigning an 84% probability to a quarter-point reduction at the upcoming Federal Reserve meeting on Tuesday and Wednesday, according to data. However, this meeting is anticipated to be among the most contentious in recent years, with investors closely monitoring the U.S. central bank’s policy trajectory and internal dynamics.
In Europe, the advancement of peace negotiations concerning Ukraine continues to be sluggish, as disagreements regarding security assurances for Kyiv and the condition of territories occupied by Russia persist without resolution. “The outcome of current negotiations could significantly influence the oil market,” analysts noted. “The diverse potential ramifications of Trump’s recent initiative to conclude the conflict could trigger a fluctuation in oil supply exceeding 2 million barrels per day.”
Currently, discussions are underway among the Group of Seven nations and the European Union regarding the potential replacement of the existing price cap on Russian oil exports with a comprehensive ban on maritime services. Sources acquainted with the situation informed that this shift could significantly restrict supplies from the world’s second-largest oil producer.
The United States has intensified its pressure on the OPEC member Venezuela, which includes actions against purported drug-smuggling vessels and the issuance of threats regarding military intervention aimed at toppling President Nicolas Maduro’s administration. Chinese independent refiners have increased their acquisitions of sanctioned Iranian oil from onshore storage tanks, utilizing newly issued import quotas, according to trade sources and analysts, thereby alleviating a supply surplus.