Oil prices extended their decline on Monday as diplomatic contacts between the US and Russia over a potential resolution to the Ukraine crisis unwound part of the geopolitical risk premium, while cautious comments from US Federal Reserve (Fed) officials further dampened risk appetite across commodities.
International benchmark Brent crude was trading at $63.51 per barrel at 10.11 a.m. local time (0711 GMT), down 0.6% from the previous close of $63.90.
US benchmark West Texas Intermediate (WTI) also decreased by about 0.7% to $59.34, compared to $59.76 in the prior session.
Kremlin foreign policy aide Yuri Ushakov said Washington and Moscow are maintaining dialogue based on understandings reached at the Alaska summit, adding that these arrangements "provide a strong foundation for moving toward a peaceful settlement."
Ushakov noted that talks on a possible meeting between Russian President Vladimir Putin and US President Donald Trump remain underway. He said the summit has been delayed for the time being, though communication between the two sides continues.
If Washington and Moscow settle on a venue, he noted, any remaining technical or political hurdles would quickly fall into place.
Footage emerging from Russia's Novorossiysk region also surfaced after Ukraine launched drone strikes on Nov. 13. Videos captured by residents show unmanned aerial vehicles targeting a refinery, fuel storage facilities and several vessels at the port - a key hub for Black Sea crude and product flows.
Despite persistent tensions between Russia and Ukraine, comments suggesting that Washington and the Kremlin are maintaining dialogue on a possible resolution to the Ukraine crisis helped reduce uncertainty over global energy supplies, adding further downward pressure on prices.
- Fed tone adds downward pressure on crude
Alongside easing geopolitical fears, oil prices faced additional downward pressure from the latest commentary by Fed officials, who signaled caution over cutting interest rates too soon.
Their remarks dampened expectations for a December rate cut, reducing the probability from around 67% to 45% in money markets.
The shift weighed on crude by strengthening the dollar and lowering investors' appetite for risk-sensitive assets, including commodities.
A more cautious Fed reduces the likelihood of near-term monetary easing, which markets typically associate with stronger demand outlooks and lower financing costs.
Analysts note that the upcoming minutes of the Federal Open Market Committee, due this week, will be closely watched for further clues on the trajectory of rate-cut expectations.
On the other hand, Iran announced it had seized the Marshall Islands–flagged tanker Talara, carrying about 30,000 tons of petrochemicals, claiming the vessel was transporting cargo "without authorization" near the Gulf of Oman - adding renewed uncertainty to maritime flows already strained by regional tensions.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
