Oil Hovers Near Highest Level in Two Weeks

SadaNews Economy - Oil prices rose near their highest levels in two weeks on Monday, as investors expect the U.S. Federal Reserve to cut interest rates this week, which could support economic growth and boost energy demand, while also monitoring the geopolitical risks threatening supplies from Russia and Venezuela.

Brent crude futures rose by approximately 0.1%, recording $63.87 per barrel, while U.S. West Texas Intermediate crude increased by about 0.2%, to $60.21 per barrel.

Both crude types closed last Friday at their highest levels since November 18. Data from "LSEG" indicates that markets are pricing in an approximately 84% chance of the Federal Reserve cutting interest rates by a quarter point during its meeting on Tuesday and Wednesday. However, statements from several members of the committee suggest that the meeting may be among the most divided in years, increasing investors' focus on monetary policy direction and discussions within the bank.

In Europe, peace talks regarding Ukraine continue to progress slowly amid ongoing disputes over security guarantees for Kyiv and the status of territories occupied by Russia. There are also differing positions among U.S. and Russian officials regarding the peace proposal put forth by President Donald Trump’s administration.

Analysts at "ANZ" stated in a client note that "the various potential outcomes of Trump's recent push to end the war could unlock a shift exceeding two million barrels per day in oil supplies."

Vivek Dar, an analyst at the Commonwealth Bank of Australia, mentioned that a ceasefire represents the most significant risk to oil price forecasts, while the continued damage to Russian oil infrastructure poses a substantial upward risk.

Dar added in another note: "We believe that concerns over oversupply will eventually manifest, especially as Russian oil flows and refined products manage to circumvent the current sanctions, which will gradually push prices down towards $60 per barrel by 2026."

Meanwhile, the G7 countries and the European Union are in talks to replace the price cap imposed on Russian oil exports with a comprehensive ban on shipping services, according to Reuters sources, a move that could lead to a further reduction in supplies from the world's second-largest oil producer.