Oil slips as market ponders potential Russia-Ukraine peace talks
Brent crude futures fell 32 cents, or 0.5%, to $66.28 a barrel by 0650 GMT.
US West Texas Intermediate crude futures for September delivery, set to expire on Wednesday, fell 32 cents, or 0.5%, to $63.10 per barrel.
The more active October WTI contract was down 30 cents, or 0.5%, at $62.40 a barrel.
Prices settled around 1% higher in the previous session.
Following talks with Ukraine President Volodymyr Zelenskiy and a group of European allies in the White House on Monday, US President Donald Trump said in a social media post he had called his Russian counterpart Vladimir Putin and begun arranging a meeting between Putin and Zelenskiy, to be followed by a trilateral summit among the three presidents.
'Oil prices are largely responding to outcomes of recent meetings between Trump-Putin and Trump-Zelenskiy and while no outright peace deal or ceasefire seems imminent, there has been some progress made and chances of further escalation or intensification of sanctions on Russia from US or Europe may be off the table for now,' said Suvro Sarkar, lead energy analyst at DBS Bank.
'Trump's language on secondary sanctions on importers of Russian oil has also eased off … which would have otherwise posed risk of disruptions to global oil supplies. Hence, we believe geopolitical risks have eased a tad for the oil market this week.'
Zelenskiy described his direct talks with Trump as 'very good' and said they had spoken about Ukraine's need for US security guarantees.
Trump confirmed the US would help with such a guarantee, although to what extent was not immediately clear.
Trump has pressed for a quick end to Europe's deadliest war in 80 years, but Kyiv and its allies worry he could seek to force an agreement on Russia's terms.
'An outcome which would see a ratcheting down of tensions and remove threats of secondary tariffs or sanctions would see oil drift lower toward our $58 per barrel Q4-25/Q1-26 average target,' Bart Melek, head of commodity strategy at TD Securities, said in a note.
'A result which would see the US apply pressure on Russia in the form of broader secondary tariffs against Russia's oil customers (as those now faced by India) would no doubt move crude to the highs seen a few weeks ago,' Melek said.
Two weeks ago, Trump had imposed an additional 25% tariff on Indian goods as a penalty for India's continued imports of Russian oil. New Delhi has accused the US of double standards in singling it out for Russian oil imports, calling the tariffs unfair, unjustified and unreasonable.
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