Oil falls $1 as Iraqi oilfield production restored, Ukraine talks continue

Oil prices slipped more than $1 on Monday after Iraq restored production at one of its oilfields which accounts for 0.5% of world oil supply, while investors weighed ongoing talks to end the war in Ukraine.

Brent crude futures were down $1.07, or 1.68%, at $62.68 a barrel by 11:05 p.m. EDT, while U.S. West Texas Intermediate crude was at $59.07, down $1.01, or 1.68%.

Iraq restored production at Lukoil's  West Qurna 2 oilfield, one of the world's largest, after a leak on an export pipeline slashed its output, two Iraqi energy officials told Reuters on Monday.

Prices had marginally pared losses earlier after sources told Reuters that Iraq had shut down production at the field, which produces around 460,000 barrels per day.

Both contracts closed Friday's trading session at their highest levels since November 18.

"If there's any kind of agreement reached in the near future on Ukraine, then Russian oil exports should increase and put downward pressure on oil prices," said Tamas Varga, oil market analyst at PVM.

Markets are meanwhile pricing in an 84% chance of a quarter-point cut at the Fed meeting on Tuesday and Wednesday, LSEG data showed.

However, board member comments indicate the meeting is likely to be one of the most divisive in years, intensifying investor focus on the bank's policy direction and internal dynamics.