WionDrive News Desk 
Oil prices experienced a downturn on Tuesday, driven by persistent demand concerns and heightened anticipation of the United States Federal Reserve’s imminent interest rate decision. Brent crude futures declined by 32 pence to USD 73.59 per barrel, while United States West Texas Intermediate crude fell 44 pence to USD 70.27 per barrel.
Market analysts attributed the price decline to multiple factors, including profit-taking following last week’s 6% rally and disappointing Chinese economic indicators. Tony Sycamore from IG Markets noted the market’s complex dynamics, emphasising the impact of recent economic data.
The Federal Reserve’s final policy meeting of the year, scheduled for Tuesday and Wednesday, is widely expected to implement a quarter-percentage-point interest rate cut. Market participants are particularly focused on potential insights into future rate reductions planned for 2025 and 2026, as well as potential policy adjustments anticipated under the incoming administration.
Anh Pham, an analyst at LSEG, highlighted the market’s current state, observing that the anticipated 25 basis point cut has already been factored into market expectations. Any unexpected developments during the meeting could potentially trigger significant market movements.
The global oil landscape continues to be shaped by complex interactions between supply and demand. The International Energy Agency’s recent monthly report suggests a potential supply overhang of 950,000 barrels per day in the upcoming year, representing approximately 1% of global supply. This projection takes into account ongoing output cuts by the OPEC+ producer group.
Non-OPEC+ countries, particularly the United States and Brazil, are expected to contribute to growing global oil supplies. Simultaneously, demand projections remain cautious, with particular attention focused on potential slowdowns in the Chinese market.
Geopolitical tensions continue to influence oil market dynamics. The European Commission recently announced its 15th package of sanctions against Russia, targeting entities in China and expanding restrictions on Moscow’s unregulated “shadow fleet” of vessels. These sanctions involve a coalition of Western countries implementing more rigorous checks on insurance documents for Russian maritime vessels in strategic waterways.
Pham suggested that the latest EU sanctions might have limited practical impact, as most current oil flows already operate outside traditional Western insurance services.
The intricate interplay between economic indicators, geopolitical developments, and monetary policy continues to create a volatile environment for global oil markets. Investors and analysts remain vigilant, closely monitoring potential shifts in supply, demand, and broader economic trends.
