Crude Oil prices declined on Tuesday as investors engaged in profit-taking after recent three-month highs fueled by new U.S. sanctions on Russia’s energy sector. Reports of a potential ceasefire in the Middle East also weighed on prices. Uncertainties surrounding U.S. government policies under President Donald Trump have further impacted commodity markets.
Brent crude fell by 0.4%, trading at $79.79 per barrel, while the U.S. benchmark, West Texas Intermediate (WTI), declined by 0.3% to $77.02 per barrel, compared to its previous close of $77.26.
Both benchmarks had surged earlier following U.S. sanctions on Russian oil producers Gazprom Neft and Surgutneftegas, along with over 180 vessels, numerous oil traders, and oil service providers on January 10. The Treasury Department also targeted subsidiaries, 80 organizations, and individuals involved in producing and exporting liquefied natural gas (LNG).
Oil markets remain mixed amid uncertainties regarding the Trump administration’s upcoming policies and concerns over potential inflation in the U.S. Investors are also awaiting the U.S. Producer Price Index (PPI) data, which could influence expectations for Federal Reserve interest rate cuts later in the year.
Reports suggest the Federal Reserve may implement its first interest rate cut of the year in the second half. Meanwhile, developments in the Middle East are being closely monitored. According to Palestinian sources, a ceasefire and prisoner exchange agreement for the Gaza Strip is nearing completion and could be signed this week. Israeli state broadcaster KAN reported that Israel’s cabinet is expected to meet today to approve the agreement.
U.S. President Joe Biden has expressed optimism about the ceasefire, stating, “We are very close to finally seeing the ceasefire proposal made months ago come to fruition.”
