WASHINGTON (dpa-AFX) - Crude oil declined on Tuesday, with the peace push by the US President to end the three-year-plus Russia-Ukraine conflict raising expectations of the long-drawn-out war coming to an end and Russia being allowed to trade freely.
WTI Crude Oil for September delivery was last seen trading down by $1.07 (or 1.69%) at $62.35 per barrel at 13:30 CT.
To end the Russia-Ukraine war, US President Donald Trump previously threatened Russia to end the war or face sanctions on its oil exports along with 'penalty sanctions' on countries buying oil from Russia; notably India and China. He even announced levying a 25% 'penalty tariff' on India.
Simultaneously, Trump stepped up measures to bring the leaders of the warring nations to the negotiating table.
Last Friday, Trump met Russian President Vladimir Putin in Alaska.
This Monday, he met the Ukraine President Volodymyr Zelenskyy after which he announced that he was preparing for a face-to-face meeting between Putin and Zelenskyy and another trilateral summit later involving himself.
Even with no breakthrough from the meetings, investors foresee a possibility of the war ending soon. If the war ends, Russia and countries buying oil from Russia could escape Western sanctions and allow Russia to trade freely.
As such, the odds of a peace deal have eased oil prices a bit.
Supply side concerns remain as OPEC+ supply is rising with the accelerated unwinding of the 2.2 million barrels per day in voluntary cuts by its member nations.
While the IEA expects stronger production growth from non-OPEC nations at 1.3 million barrels per day this year and 1 million barrels per day next year, the EIA projects global inventories building by 2.10 million barrels per day in the fourth quarter.
On the monetary front, the much-awaited Jackson Hole Economic Symposium, where the world's leading central bankers and economists convene, begins this Thursday. The keynote address by US Fed Chair Jerome Powell could reveal some input on which way monetary policy is heading as well as the possible movement of the US Dollar.
This meeting gains importance ahead of the September 17 FOMC meeting, where the Fed will make a decision on interest rates.
Crude oil being a dollar-denominated commodity, traders feel that its trajectory in the coming weeks depends on the Fed's decision next month.
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