Oil prices fell on Thursday as investors shifted their focus back toward peace talks between Russia and Ukraine, while also weighing the potential fallout from the United States seizing a sanctions-hit oil tanker off the coast of Venezuela.

Brent crude futures dropped 81 cents, or 1.3%, to $61.40 a barrel by 09:04 GMT, while US West Texas Intermediate fell 78 cents, also 1.3%, to $57.68.

Russian Foreign Minister Sergei Lavrov said Thursday that US envoy Steve Witkoff’s visit to Moscow this month had resolved a misunderstanding between the two countries, adding that Moscow had delivered its proposals to Washington regarding collective security guarantees.

The benchmarks had closed higher the previous session after the United States said it had seized an oil tanker off Venezuela, reigniting concerns over supply disruptions amid rising tensions between the two countries.

Amrile Jamil, senior oil analyst at LSEG, said that so far the impact of the seizure has not spilled over into the market, but any further escalation would trigger sharp volatility in crude prices. He added that the market remains focused on developments in the Russia-Ukraine peace process.

US President Donald Trump said Wednesday: “We just seized a tanker off the coast of Venezuela — a big tanker, very big — the biggest ever, actually. And other things are happening.”

US officials did not disclose the vessel’s name, but UK-based Vanguard, a maritime risk firm, said the tanker Skipper is believed to have been detained off Venezuela.

Traders and industry sources said Asian buyers are demanding steep discounts on Venezuelan crude, pressured by inflows of sanctioned oil from Russia and Iran, as well as rising loading risks in Venezuela amid a larger US military presence in the Caribbean.

Investors were also focused on the Russia-Ukraine peace talks, as leaders of the UK, France, and Germany held a call with Trump to discuss Washington’s latest efforts to broker a settlement — which they described as a “critical moment” in the process.

A source in Ukraine’s security service (SBU) told Reuters Thursday that Ukrainian drones struck a Russian oil platform in the Caspian Sea for the first time, halting oil and gas extraction at the facility.

Meanwhile, the International Energy Agency raised its forecast for global oil demand growth in 2026 and lowered its expectations for supply growth in its monthly report on Thursday, pointing to a slightly narrower surplus next year.

In other developments, the Federal Reserve — sharply divided — cut its policy rate again. Lower interest rates can reduce borrowing costs for consumers and support economic growth, which in turn can boost oil demand.

The dollar found support on Thursday from broad risk aversion in global markets, but it failed to recover its late-Wednesday losses against peers such as the euro, yen, and sterling, after the Federal Reserve delivered guidance that was less hawkish than some investors had expected.

Asian investors moved out of high-risk assets — including equities and cryptocurrencies — after disappointing results from US cloud-computing firm Oracle (ORCL.N), reigniting concerns that soaring AI-infrastructure costs may outpace the ability to generate profits.

This helped slow the dollar’s decline, which had initially come under pressure following remarks from Fed Chair Jerome Powell that surprised investors who were positioned for a more hawkish tone.

Even so, the wave of risk-driven selling eased somewhat in Europe. The euro traded at $1.1704, steady on the day near a two-month high after gaining 0.6 percent on Wednesday. Sterling also held its ground at $1.13374 after a 0.65 percent rise the previous day.

The dollar weakened further against the yen, slipping 0.14 percent to ¥155.8 after a 0.56 percent drop on Wednesday.

The Fed cut interest rates by 25 basis points on Wednesday, but with the move broadly expected, market reactions reflected the tone of the guidance and the division within the policy committee.

Chris Turner, head of global markets at ING, said investors had been preparing for a “hawkish cut,” but only two members opposed the decision, and the Fed maintained just one rate cut in its median projection for 2026.

He added that Powell also appeared reluctant to endorse the view that the Fed is already in “pause mode.”

Before the meeting, traders were debating whether they might receive a signal similar to those from the Reserve Bank of Australia governor or a key policymaker at the European Central Bank, both of whom suggested the next move could be a hike.

Pressure on the dollar also grew after investors moved into US Treasuries. The Fed announced it will begin purchasing short-term government bills starting 12 December to help manage market liquidity, with the first round expected to include about $40 billion in Treasury bills.

Pressure on the Australian dollar and cryptocurrencies

While major currencies remained focused on the Fed, risk-sensitive assets continued to track weakness in technology shares.

Bitcoin — often viewed as a barometer of risk appetite — briefly slipped below $90,000 and was last down 2.4 percent. Ether dropped more than 4 percent to $3,200.

Gracy Li, CEO of OKX in Singapore, said the decline in cryptocurrencies reflected continued deleveraging since October. “Even with a more accommodative Fed stance, the market is still unwinding excess leverage, so reactions to economic signals are slower than usual,” she noted.

She added that a 25-basis-point rate cut had already been priced in and that the broader economic and geopolitical backdrop remains uncertain, limiting immediate upside.

The Australian dollar also weakened alongside the pullback in risk appetite, dropping 0.5 percent to $0.6644. Pressure increased after data showed Australian employment in November recorded its largest decline in nine months.

Swiss franc rises after SNB decision

The Swiss franc edged higher after the Swiss National Bank kept its policy rate unchanged at 0 percent. The bank said the recent agreement to scale back US tariffs on Swiss goods had improved the economic outlook, even as inflation came in below expectations.

The franc last traded at 0.7992 per dollar after touching its strongest level in nearly a month, and at 0.9348 against the euro.

Gold prices rose in the European market on Thursday, extending gains for a third consecutive session, supported by a weaker US dollar after the latest Federal Reserve meeting delivered a less-hawkish tone than markets had anticipated.

As expected, the Federal Reserve cut its benchmark rate by 25 basis points to a range of 3.75 percent — the lowest since September 2022 — marking a third consecutive rate cut.

Price Overview

• Gold prices today: Spot gold rose 0.45 percent to $4,247.81, from an opening level of $4,228.27, after touching an intraday low of $4,210.44.

• At Wednesday’s settlement, gold gained 0.5 percent, marking a second straight daily advance as investors increased safe-haven buying following the Fed meeting.

US Dollar

The US dollar index fell 0.1 percent on Thursday, deepening losses for a second session, and reached a two-month low of 98.54, reflecting continued weakness in the currency against a basket of major peers.

The outcome of the Fed meeting strengthened expectations for two additional rate cuts next year, compared with the Fed’s median projection of a single 25-basis-point cut.

Nick Rees, head of macro research at Monex Europe, said the most important takeaway was the Fed’s tilt toward easier policy in both the statement and Chair Jerome Powell’s press conference.

Federal Reserve

At the final policy meeting of 2025, the Fed cut rates by 25 basis points to 3.75 percent, as widely expected — the lowest since September 2022 and the third cut in a row.

The vote was not unanimous: nine members supported the cut, two preferred to hold rates steady, and one argued for a larger 50-basis-point move.

The Fed said economic activity continues to expand at a moderate pace, while job gains have slowed and unemployment has edged higher. It also noted that inflation remains elevated.

Economic Projections

The Fed’s quarterly projection report included several key revisions:

• Economic growth: Raised to 1.7 percent for 2025 (from 1.6 percent), to 2.3 percent in 2026 (from 1.8), and to 2.0 percent in 2027 (from 1.9).

• Headline inflation: Lowered to 2.9 percent in 2025 (from 3.0), to a range of 2.4–2.6 percent in 2026, while keeping 2027 at 2.1 percent.

• Core inflation: Lowered to 3.0 percent in 2025 (from 3.1), to 2.5 percent in 2026 (from 2.6), and kept at 2.1 percent for 2027.

• Policy rate: The Fed kept its rate projections unchanged — 3.75 percent for 2025, 3.5 percent for 2026, and 3.25 percent for 2027.

Jerome Powell

Powell said there was “broad agreement” behind the decision, noting that most members supported a 25-basis-point cut and stressing that the Fed remains focused on price stability and maximum employment.

He added that the US economy continues to outperform peers in terms of inflation, labor-market health, and growth. Powell said the Fed does not view rate hikes as a likely scenario going forward, but will adjust policy as data and risks evolve.

Gold Outlook

Tim Waterer, chief market analyst at KCM Trade, said gold’s upside remains limited because the Fed’s underlying message was that any additional cuts would likely be very modest.

SPDR Gold Trust

Holdings at SPDR Gold Trust, the world’s largest gold-backed ETF, fell by 1.15 metric tons on Wednesday — the fourth daily decline — bringing total holdings to 1,046.82 metric tons, the lowest since 3 December.

The euro rose in European trading on Thursday against a basket of global currencies, extending gains for a second consecutive session against the US dollar and marking its highest level in two months. The move came amid strong demand for the single currency as one of the most attractive investment opportunities in the foreign-exchange market, especially after the interest-rate gap between Europe and the United States narrowed further.

The US dollar deepened losses after the Federal Reserve’s meeting delivered a tone that was less hawkish than markets had anticipated, encouraging investors to increase their bets on two additional rate cuts in 2026.

European Central Bank President Christine Lagarde highlighted the recent improvement in economic activity across the eurozone and hinted that growth forecasts could be revised higher at next week’s policy meeting.

Price overview

• EUR/USD today: the euro rose 0.1% to 1.1707 dollars — its highest since 17 October — from an opening level of 1.1695 dollars, after touching a low of 1.1690 dollars.

• The euro ended Wednesday up 0.6% against the dollar — its first gain in five sessions and the strongest daily rise since 16 September — supported by the outcome of the Federal Reserve meeting.

US dollar

The dollar index fell 0.1% on Thursday, deepening losses for a second straight session and hitting a two-month low of 98.54, reflecting continued weakness in the US currency against a basket of global peers.

The Federal Reserve on Wednesday cut interest rates by 25 basis points at the conclusion of its final meeting of the year, lowering the target range to 3.75% — the lowest since September 2022 — marking a third consecutive rate cut.

However, Fed Chair Jerome Powell’s comments at the press conference were less hawkish than investors expected, surprising markets that had anticipated a more aggressive stance.

The meeting reinforced market expectations for two additional rate cuts next year, compared with the Fed’s median projection of just one 25-basis-point cut.

Nick Rees, head of macro research at Monex Europe, said: “For us, the key takeaway was the tilt toward monetary easing in both the updated policy statement and Chair Powell’s press conference.”

Christine Lagarde

ECB President Christine Lagarde said Wednesday that the eurozone economy has shown notable resilience amid global trade tensions and that growth is now approaching its potential pace — a shift that could prompt the ECB to lift its growth forecasts at next week’s policy meeting.

Speaking at a Financial Times event, Lagarde noted that the ECB raised its projections during the last forecasting round, adding that “we may do so again in December.” She pointed to improving sentiment indicators — particularly in business and manufacturing — as well as labor-market data that continue to show economic strength.

Lagarde reiterated that monetary policy is “in a good place,” which investors interpret as a signal that no rate adjustments are currently needed.

European interest rates

• Market pricing for a 25-basis-point rate cut by the ECB in December remains below 10%.

• Reuters sources indicated that the ECB is likely to keep rates unchanged at the upcoming December meeting.

Interest-rate gap

Following the Fed’s decision, the interest-rate gap between Europe and the United States narrowed to 160 basis points in favor of US rates — the smallest spread since May 2022 — a development that supports further appreciation in the euro against the US dollar.