DTN Oil Update
Oil Prices Ease on Russia Watch, Ahead of Fed Rate Decision
SECAUCUS, N.J. (DTN) -- Oil futures remained soft on Tuesday, Dec. 9, as the Kremlin reacted favorably to a new U.S. national security strategy that called for better relations with Russia, which faces both U.S. and European sanctions on its energy exports.
The start of a two-day Federal Reserve meeting that could end Wednesday, Dec. 10, with the year's third straight interest rate cut of 25 basis points, however, limited the downside in energy prices, which are typically sensitive to any economic boosting measures.
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The NYMEX WTI futures contract for January delivery was down by $0.07 to $58.81 bbl.
ICE Brent for February shipments slipped by $0.11 to $62.38 bbl.
The front-month RBOB futures contract slid by $0.0004 to $1.7977 gallon.
NYMEX front-month ULSD futures slipped by $0.0203 to $2.2769 gallon.
The U.S. Dollar Index was little changed at 99.12 against a basket of foreign currencies.
A new U.S. national security strategy document released Friday, Dec. 5, that spoke of Washington's desire to improve its relationship with Russia was welcomed by the Kremlin. The Trump administration also said in the document that ending the war in Ukraine -- which is key to the removal of sanctions on Russian oil -- is a core U.S. interest to "reestablish strategic stability with Russia."
"The nuances that we see in the new concept certainly look appealing to us," Kremlin spokesman Dmitry Peskov said, referring to the new U.S. strategy, the Associated Press reported.
Without sanctions, Russian oil could resume its free flow to global markets, adding to a crude glut. OPEC, or the Organization of the Petroleum Exporting Countries, had already cautioned that the crude market was in a surplus of 500,000 bpd as of the third quarter.