Crude Oil prices fell on Tuesday, as the overall weakness in financial markets and concerns over Global supply surplus outweighed the impact of escalating tensions in the Middle East.

WTI Crude Oil fell by 1%, closing below $67 per barrel, ending two consecutive days of gains.

U.S. stock markets fell on Tuesday ahead of the Federal Reserve's interest rate decision to be announced on Wednesday. However, oil prices briefly rose by 1.7% in the morning session due to Israel's military strikes on Gaza and increased pressure from the USA on Iran.

"As tensions between Israel and Hamas re-emerge, the geopolitical risk premium reflected in Crude Oil prices is minimal," said Rebecca Babin, senior Energy trader at CIBC Private Wealth Group. "Against the backdrop of potential inventory increases and heightened macroeconomic risks later this year, most traders view this premium as a Sell opportunity."

As the escalating Global trade war threatens demand, OPEC and its allies will increase output starting in April, leading to a quarterly decline in Crude Oil prices.

Russian President Putin agreed to limit strikes on Ukrainian Energy Assets during a call with U.S. President Trump, but did not commit to a broader 30-day ceasefire.

WTI Crude Oil Futures for April delivery fell by 1%, settling at $66.90 per barrel.

Brent Crude Oil for May fell by 0.7%, closing at $70.56 per barrel.