FX.co ★ Oil Holds Decline

WTI crude oil futures fell below $59 per barrel on Tuesday, following a 2% drop in the previous session, as expectations of a supply surplus overshadowed geopolitical concerns. Market participants are now eagerly awaiting updates from the EIA and OPEC+ later this week, which will provide fresh insights into the supply-demand balance. In mid-October, the IEA anticipated a significant surplus by 2026, while OPEC+ recently adjusted its Q3 forecast from a deficit to a surplus. Adding to the pressure, reports on Monday confirmed that Iraq has resumed production at Lukoil’s West Qurna-2 oilfield—accounting for 0.5% of global supply—after resolving an export-pipeline leak. These supply factors have largely counteracted geopolitical risks linked to the stalled Russia-Ukraine peace negotiations and escalating US-Venezuela tensions. Additionally, traders are monitoring the US Federal Reserve's anticipated 25bps interest rate cut, which could potentially stimulate economic activity and increase energy demand.