Oil prices slipped during Asian trading on Tuesday after a swift restoration of Russian exports eased supply concerns, while investors continued to assess the Federal Reserve’s upcoming policy direction ahead of key U.S. economic data.
Russian Exports Resume, Easing Near-Term Supply Fears
By 21:06 ET (02:06 GMT), January Brent futures were down 0.6% at $63.83 per barrel, while WTI contracts fell by a similar margin to $59.54.
Loadings at Russia’s Novorossiysk port — a major Black Sea export hub — resumed on Sunday, ending a two-day halt caused by a missile and drone strike reportedly originating from Ukraine.
The outage temporarily disrupted around 2.2 million barrels per day, equivalent to nearly 2% of global supply. The quicker-than-expected recovery reduced fears of a short-term shortage and placed downward pressure on crude prices.
Still, longer-term supply risks remain. The U.S. Treasury said sanctions on Rosneft and Lukoil have already dealt a significant blow to Russia’s oil revenues and may constrain export volumes in the coming months. A November 21 deadline for global firms to cease dealings with these companies is raising the possibility of fresh disruptions.
Oil Market Turns Focus Toward Federal Reserve Outlook
At the same time, the demand outlook for oil is tied closely to U.S. economic conditions — and therefore to the Fed’s monetary policy. Governor Christopher Waller recently emphasized signs of a weakening labor market, using the argument to support a potential rate cut in December.
However, there is no clear consensus within the central bank. Several officials have warned that inflation remains elevated and argued for caution before easing policy.
A temporary U.S. government shutdown delayed several important economic releases, including the September nonfarm payrolls report due Thursday. The lack of timely indicators has added uncertainty around the Fed’s next move, creating another layer of volatility for crude markets.
Interest Rate Path Remains Key Driver for Energy Markets
The ambiguity surrounding Fed policy has direct implications for oil. Higher interest rates typically slow economic activity, reduce fuel consumption, and strengthen the U.S. dollar — making dollar-denominated crude more expensive for global buyers.
Conversely, potential rate cuts could support energy demand, weaken the dollar, and provide a tailwind for oil prices.
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