Oil prices hover near two-week highs at $63.81 as markets await clarity from EIA, OPEC reports

Crude oil prices stabilized near two-week peaks on Monday, buoyed by expectations of a U.S. Federal Reserve interest rate cut and escalating geopolitical risks in key producing regions. Brent crude futures traded around $63.81 per barrel, up 0.09 percent on the day, while West Texas Intermediate (WTI) crude hovered near $60.16, reflecting a 0.13 percent gain. Despite year-to-date declines of over 11 percent, the benchmarks remained on track for weekly advances, underscoring a fragile balance between supply concerns and demand optimism.

Anticipation of a Fed rate reduction this week dominated trading sentiment, as lower borrowing costs could spur U.S. economic growth and lift fuel consumption in the world’s largest oil consumer. Markets priced in a high probability of a 25-basis-point cut, potentially easing recession fears and supporting industrial activity. Geopolitical premiums further bolstered prices, with stalled U.S.-Russia talks over Ukraine sustaining sanctions on Moscow’s energy exports and enabling ongoing Ukrainian strikes on Russian refineries and pipelines.

Tensions extended to Venezuela, where President Donald Trump’s signals of imminent action raised fears of disruptions to the country’s 1.1 million barrels per day (bpd) output, according to Rystad Energy estimates. Ukrainian attacks, including on the Druzhba pipeline, heightened supply risks without immediate flow interruptions, while Russian tanker activity surged amid U.S. sanctions. These factors offset softer elements, positioning oil for its first weekly rise in weeks.