Oil prices fluctuated amid volatile trading as escalating tensions between Russia and Ukraine raised the possibility of further supply disruptions.
West Texas Intermediate (WTI) crude prices started the day down 1.75%, trading near $58 per barrel.
Prices briefly turned positive after Russian President Vladimir Putin threatened potential retaliatory action against ships from countries that aided Ukraine in Moscow's war, according to Interfax.
"Today's news releases should be highly sensitive to headlines, and the path of least resistance still looks lower," said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. "In this environment, even small signs of progress on a peace deal could trigger a bigger decline than the one generated by a delay in negotiations on the upside, but expect plenty of debate with conflicting narratives."
US envoy Steve Witkoff arrived in Moscow to meet with Putin, who claimed a key Ukrainian city had fallen to Russia on the eve of Tuesday's talks on a potential peace plan to end the war.
Over the past week, four Russian oil tankers have been attacked, a sharp increase in attacks on shipping linked to Moscow. Russia, despite being under strict international sanctions, remains a major oil producer on the global market, and any further escalation in its war in Ukraine would increase bullish momentum for crude oil.
However, a deal to end the war could allow Russian oil to flow more freely into the global market, which is already bracing for oversupply.
Earlier on Tuesday, Putin also underscored the need for economic growth in Russia, commenting separately that the government was dissatisfied with the imbalances emerging in some industries. The comments came as Russian oil producers are struggling amid lower crude prices, sanctions, and a stronger currency. Geopolitical risks also arise from potential US military action in Venezuela, which is providing a floor for prices. US President Donald Trump held a meeting on Monday night as American troops massed near the country.
WTI for January delivery fell 0.3% to $59.14 a barrel at 10:52 a.m. in New York. Brent for February delivery fell 0.2% to $63.05 a barrel. (alg)
Source: Bloomberg
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