Oil prices fell to a near two-month low on Tuesday. This was due to a lack of immediate escalation in tensions in the Middle East, leading traders to price out a risk premium from the prices.
Caution ahead of a meeting of the Organization of Petroleum Exporting Countries (OPEC) also weighed on market sentiment. However, the recent weakness in crude oil prices is likely to see the cartel downplay any plans for scaling back production cuts.
Anticipation of key central bank meetings this week, including the Federal Reserve, kept oil prices on the backfoot. Persistent concerns over slowing demand, especially in top importer China, also continued to dampen market sentiment.
Brent oil futures expiring in September fell 0.2 percent to $79.63 per barrel, while West Texas Intermediate (WTI) crude futures fell 0.3 percent to $75.62 per barrel by 21:27 ET (01:27 GMT).
Looking ahead, the Joint Ministerial Monitoring Committee of OPEC is set to meet on August 1. However, reports suggest the meeting will be routine and is unlikely to yield significant changes to production plans.
Read more: Oil prices flat as demand outlook and supply glut concerns weigh
Analysts argued that the recent weakness in crude prices could push major producers like Russia and Saudi Arabia to further downplay plans to increase production later this year, contrary to their earlier forecasts in 2024.
Oil prices were also pressured by a strengthening U.S. dollar, which rebounded on Monday in anticipation of the Federal Reserve meeting this week. While the Fed is widely expected to keep interest rates steady, any signals on plans for future rate cuts will be closely watched by the market.
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