Oil prices stabilized near their highest levels in about two weeks as expectations grew that the U.S. Federal Reserve may move toward an interest rate cut, supporting economic growth prospects and energy demand. Brent crude futures edged up slightly to around $63.89 per barrel, while U.S. West Texas Intermediate crude reached about $60.23, after ending last week’s trading at the highest level since mid November.
Market estimates point to a strong likelihood of a quarter point rate cut, although differing views among Fed members could make the upcoming meeting one of the most sensitive in recent periods, directing investor focus toward the future path of U.S. monetary policy. On the international front, talks related to a potential settlement in Ukraine are making limited progress due to unresolved contentious issues, while Washington and Moscow continue to diverge over the proposal put forward by the current U.S. administration. Analysts at ANZ believe the outcome of these efforts could have a tangible impact on global supply levels, while analysts at the Commonwealth Bank of Australia suggest that any long-term stability agreement could gradually weigh on prices, whereas continued pressure on export infrastructure may provide price support.
At the same time, G7 countries and the European Union are considering shifting from the current price cap mechanism on Russian oil to broader maritime controls, a move that could affect the volume of supply available in global markets. The United States has also stepped up its regulatory measures related to Venezuela, an OPEC member, as part of monitoring commercial activities tied to its exports. Meanwhile, independent refineries in China increased their purchases of Iranian crude using new import quotas, helping absorb part of the excess supply in the market.
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