Oil prices declined further on Tuesday as renewed supply pressures, geopolitical uncertainty and expectations around the U.S. Federal Reserve’s policy decision continued to weigh on market sentiment.
Brent crude oil, against which Nigerian crude oil is priced, slipped 7 cents to $62.42 per barrel at 08:17 a.m. in Nigeria, while U.S. West Texas Intermediate (WTI) declined 13 cents to $58.75 per barrel.
The downward trend followed the restoration of output at Lukoil’s West Qurna-2 field in Iraq, one of the world’s largest oilfields, adding to an already elevated supply outlook. The development reinforced concerns surrounding ample supply heading into 2026.
Market attention remained fixed on diplomatic activity as Ukraine prepared to present a revised peace proposal to the United States after discussions between President Volodymyr Zelenskiy and the leaders of France, Germany and the United Kingdom.
Traders continued to evaluate the potential implications for Russian crude flows should negotiations progress or stall.
Analysts noted that crude prices could remain range-bound until there is clarity on the geopolitical front. A breakdown in peace discussions could trigger higher prices, while meaningful progress, particularly one that enables a broader return of Russian volumes to the market, may increase downward pressure.
Additional headwinds emerged from discussions among G7 members and the European Union regarding a transition from the Russian oil price cap mechanism to a full maritime services ban.
The proposed change aims to cut Russia’s oil revenue and could reshape export dynamics depending on enforcement.
Meanwhile, attention is shifting to the International Energy Agency’s (IEA) December Oil Market Report, scheduled for release on 11 December.
Prior projections from the agency indicated a potential record surplus in 2026, a key concern for traders monitoring medium-term price direction.
Further confirmation of a widening surplus could place WTI within the $56.80–$57.50 range, analysts said.
The market is also assessing the Federal Reserve’s policy decision, due on Wednesday. With the probability of a 25-basis-point rate cut priced at about 87%, expectations for lower borrowing costs have offered limited short-term support.
However, analysts maintain that any positive demand impact may be capped by broader oversupply risks.
Overall, crude trading remained anchored within the $60–$65 range with supply-side developments, central bank decisions and geopolitical negotiations dictating short-term price direction.