WTI drifts lower to near $58.50 on Iraq oilfield recovery

• WTI price loses ground to near $58.65 in Tuesday’s early Asian session. 

• Iraq restores production at the West Qurna 2 oilfield. 

• Fed rate cut expectations and slow progress on Ukraine peace talks might cap the WTI’s losses. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $58.65 during the Asian trading hours on Tuesday. The WTI price edges lower as Iraq restores production at one of its oilfields. Traders await the release of the American Petroleum Institute (API) crude oil stockpiles report later on Tuesday.

Reuters reported on Monday that Iraq resumed production at Lukoil’s West Qurna 2 oilfield after a leak on an export pipeline slashed its output. The field, which produces over 460,000 barrels per day, accounts for about 0.5% of the world's oil supply and 9% of total output in Iraq, OPEC's second-largest producer after Saudi Arabia. 

On the other hand, geopolitical risks could provide some support to the WTI price. US President Donald Trump said he was disappointed in Ukrainian President Volodymyr Zelenskiy’s handling of a US proposal to end the nearly four-year-old war. Analysts expect the restrictions on Russian energy exports to remain, following Zelenskiy's statement that there is no accord yet to end the Russian-Ukrainian war.  

Oil traders await the US Federal Reserve (Fed) interest rate decision on Wednesday, which is anticipated to deliver a quarter-point rate cut at its December meeting. Rising Fed rate cut bets could strengthen the outlook for higher energy demand in 2025 and underpin the black gold. Lower interest rates generally drag the US Dollar (USD) lower and boost the WTI price, as it makes USD-denominated commodities cheaper for foreign buyers.