Oil prices traded little changed on Tuesday, finding support from expectations that the Federal Reserve (Fed) could have greater scope for rate cuts, and rising US-Venezuela tanker tensions, while weak year-end demand and looming supply surplus concerns capped gains.
International benchmark Brent crude was trading at $61.49 per barrel at 10.28 a.m. local time (0728 GMT), down nearly 0.2% from the previous close of $61.62.
US benchmark West Texas Intermediate (WTI) also decreased by about 0.2% to $57.85, compared to $57.96 in the prior session.
Signs of easing inflation in the US have fueled expectations that the Fed might have greater scope to cut interest rates, supporting global risk appetite, with markets pricing in two rate cuts next year.
Analysts say US gross domestic product data due later during the day could help set the tone for markets and provide further clues on the Fed's policy path in the coming year.
Separately, international media reported that US President Donald Trump might announce his choice to succeed Fed Chair Jerome Powell as early as the first week of January.
While expectations of greater scope for Fed rate cuts are lending support to oil prices through a weaker dollar and improved risk sentiment, gains remain limited amid soft demand conditions and surplus concerns.
Meanwhile, reports that US authorities were pursuing another oil tanker in international waters off Venezuela have continued to heighten supply concerns in the market.
At a press briefing on Monday, Trump said a sizable US fleet was operating around Venezuela, warning that President Nicolas Maduro would face consequences if he chose to escalate.
Maduro cautioned that continued US seizures of Venezuelan oil tankers could have negative consequences for the global economy.
The standoff has added a geopolitical risk premium to oil prices, as traders factor in the risk of shipping delays and disrupted Venezuelan exports, particularly to key buyers such as China.
However, a weak demand outlook and expectations of excess supply have continued to cap gains, while thin trading volumes ahead of the year-end holidays have contributed to a downward bias in prices.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr