West Texas Intermediate (WTI), the US crude benchmark, is trading near $58.65 during Tuesday’s Asian session, moving lower as Washington advances a peace plan aimed at ending the three-year conflict between Ukraine and Russia. Traders are also positioning ahead of the American Petroleum Institute’s (API) weekly crude inventory report due later on Tuesday.
The US push for a negotiated settlement in the Russia-Ukraine war has added downside pressure to crude markets. Ukrainian President Volodymyr Zelenskiy said Monday that talks have reached a “critical moment,” highlighting that discussions involving territory and sovereignty remain particularly sensitive.
“We should expect a nervous oil market ahead of Thanksgiving on Thursday,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. “Several factors point to a peace agreement or possibly a ceasefire moving closer over the weekend, which supports further price declines this week.”
However, broadening expectations of a Federal Reserve rate cut in December may help cushion WTI’s losses. Fed Governor Christopher Waller remarked Monday that current data shows labor-market softness sufficient to justify another 25-basis-point cut.
According to the CME FedWatch Tool, odds of a December rate cut surged to 80% on Tuesday, up sharply from 30% last week. Lower interest rates typically weaken the US Dollar (USD), providing support for dollar-denominated commodities such as WTI by making them more affordable for overseas buyers.
