WASHINGTON (dpa-AFX) - Crude oil gave ground on Tuesday as the efforts by the U.S. to end the Russia-Ukraine conflict send positive signals of a ceasefire sooner than expected.
WTI Crude Oil for January delivery was last seen trading down by $0.55 (or 0.93%) at $58.77 per barrel.
In the ongoing war between Russia and Ukraine, Russia claimed the capture of Pokrovsk, an eastern Ukrainian town, and Vovchansk in the northeastern Kharkiv region. However, Ukraine has not confirmed the takeover.
Recently, Ukrainian drones attacked a Black Sea Terminal owned by the Caspian Pipeline Consortium forcing it to halt its operations.
Yesterday, the CPC stated that it has resumed oil shipments from one mooring point in the terminal.
Another Russian-flagged tanker Midvolga-2 had been reportedly attacked by Ukraine in the Black Sea, off the Turkish coast.
As an expected Russian retaliation could be fierce, supply side concerns for oil increased.
Russia has been hit by sanctions on its oil exports by the U.S. and the West and is seeing heavy shortages in its petrodollar revenue.
The U.S. has also undertaken mediatory efforts to end the Russia-Ukraine conflict.
A meeting between high-level officials of the U.S. and Ukraine was held in Florida. After the discussion, U.S. delegates reported that the discussion was progressive, adding that some issues require further refinement.
U.S. envoy for Russia Steve Witkoff is meeting Russian President Vladimir Putin today to take the peace process to its next level.
If U.S. efforts bear fruit, the eventual lifting of sanctions on Russia would allow the free flow of excess oil to the market.
In Latin America, the recent warnings by U.S. President Donald Trump that planes should avoid air spaces in and around Venezuela has triggered concerns of a U.S.-Venezuela war.
The administration has justified sending a dozen-plus warships and 15,000-plus troops to the region as a measure to eliminate the drug trade that spills over into the U.S. as well as to halt undocumented migrants entering the U.S.
However, Venezuelan President Nicolas Maduro attributes these steps as a desire by the U.S. to seize the nation's rich oil reserves.
Maduro sent an open letter to OPEC nations to intervene and save Venezuela's oil wealth.
Venezuela is sitting on an enormous 303 billion barrels worth crude oil - one-fifth of the world's global stockpile. Still, the country produces only 1 million barrels of oil per day.
According to Rigzone, the U.S. Energy Information Administration has projected in its latest Short Term Energy Outlook (STEO) that regular gasoline and the U.S. on-highway diesel fuel retail price will fall in 2025 and 2026, aligning with several recent reports suggesting a slowing demand growth for oil, next year.
Currently, markets are anticipating the final FOMC meeting of the year to be held in around a week's time.
Recent reports that Kevin Hassett would be the replacement for current Federal Reserve Chair Jerome Powell by mid-2026 has been welcomed by investors as Hassett is a low-interest-rate supporter.
Data from the U.S. so far are in favor of a rate cut, with the job market showing slow momentum.
The U.S. dollar index was last seen trading at 99.46, up by 0.06 (or 0.06%) today.
Currently, investors are pricing in an 87.2% chance of a quarter-point rate cut at the Fed's upcoming December 9-10 meeting.
The Fed's decision could impact the U.S. dollar and consequently oil prices in the near term.
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