Oil prices slipped as reports that Saudi Arabia was offering additional crude cargoes via Oman eased concerns about the scale of Middle East supply disruptions. Elevated crude prices have supported risk sentiment towards net oil exporters such as Brazil and Colombia.
Brazil's stock index .BVSP was down 0.3%, with state oil producer Petrobras falling 3.5%. The real BRL= added 0.2% ahead of Wednesday's interest rate decision.
The Monetary Policy Committee, Copom, is expected to cut Brazil's Selic benchmark rate by 25 basis points for a fifth straight meeting, to 13.75%, according to a Reuters poll.
"August's IPCA (inflation data) continues to indicate a benign inflation environment, supported by declines in electricity tariffs, gasoline prices, airfares, and food prices. As a result, August's reading kept the door open for a 25 bp cut in the Selic rate," Rabobank analysts said in a note.
Investors are also mindful of political developments in Brazil, with opinion polls indicating a tight presidential election battle between incumbent Luiz Inácio Lula da Silva and challenger Flávio Bolsonaro.
Separately, economic activity in Brazil fell by a seasonally adjusted 0.2% in July from the previous month, a central bank index showed.
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