RoydadNaft –  Oil prices traded largely flat on Tuesday, with looming global oversupply in 2026 offsetting renewed anxiety that Western sanctions on Russian barrels will remain firmly in place amid faltering efforts to end the Ukraine war.

Brent crude was down 17 cents, or 0.3%, at $63.20 a barrel by 0158 GMT, while U.S. West Texas Intermediate (WTI) slipped 12 cents, or 0.2%, to $58.71. Both benchmarks had climbed 1.3% in the previous session.

Market sentiment swung Monday on growing doubts over a near-term Russia-Ukraine peace agreement. A U.S.-brokered proposal was rejected by Kyiv and European allies as little more than a Kremlin wish list, dimming prospects that sanctions on Russian oil and fuel exports could be lifted anytime soon.

A lasting peace deal would have risked flooding an already well-supplied market with previously restricted Russian volumes. The absence of progress therefore provided modest support to prices.

Yet analysts warn the bigger story for 2026 remains bearish. Deutsche Bank forecast a crude surplus of at least 2 million barrels per day next year — with no clear return to deficits even by 2027 — as non-OPEC+ supply growth, led by the Americas, is expected to significantly outpace demand.

“The path forward into 2026 remains a bearish one,” Deutsche Bank analyst Michael Hsueh wrote in a note.

Some counterbalancing support came from rising expectations of a U.S. interest-rate cut at the Federal Reserve’s December 9–10 meeting, which several policymakers have signaled they favor. Lower rates would boost economic activity and, in turn, oil consumption.

For now, the tug-of-war between ample supply forecasts and persistent geopolitical risk premiums has left crude benchmarks range-bound, with the market awaiting clearer signals on both OPEC+ output policy and the trajectory of the Ukraine conflict.