West Texas Intermediate (WTI) crude oil futures dropped to $64.4 per barrel on Tuesday. This decline follows a nearly 2% increase in the previous session, which had pushed prices to their highest point in nearly three weeks. Investors are keeping a close eye on the ongoing Russia-Ukraine conflict, which continues to impact market sentiment. The price surge on Monday was driven by fears of potential supply interruptions after Ukraine targeted Russian power and energy sites with drone strikes on Sunday. Additionally, concerns were exacerbated by U.S. President Donald Trump's indication that further tariffs on Russia's trade partners or additional sanctions against Moscow might be implemented if no diplomatic progress is made in the next fortnight.
On the demand front, there are expectations of a more accommodative U.S. monetary policy, providing a supportive backdrop. Federal Reserve Chair Jerome Powell, last Friday, hinted at the possibility of a rate cut in September. Such a move could foster economic growth, subsequently enhancing energy demand.
