Russian Sanctions Remain Tighter After Trump Deadline
President Trump has passed the deadline given to Russia to reach a peace agreement with Ukraine without facing tougher U.S. sanctions against Russia. This may have contributed to the recent drop in crude oil prices. Brent oil prices are now at their lowest level since early June, according to experts from ING, Ewa Manthey and Warren Patterson.
Oil market participants are currently leaning towards a bearish outlook. They are waiting for the meeting between President Trump and President Putin on Friday to see if there is any progress towards a peace deal. However, since Russia demands that Ukraine surrender the occupied territories to end the war, it is unlikely that Ukraine will agree. If tensions decrease, the risk of sanctions would disappear and oil prices could fall even further.
Recent data shows that speculators have started to reduce their long positions in the oil market. For example, long positions in Brent oil decreased by 20,375 contracts to 240,977 contracts. Similarly, long positions in gasoil fell by 14,637 contracts to 86,007 contracts. This indicates that the oil market is weakening and market players are becoming more cautious.
Meanwhile, the number of oil rigs in the United States experienced its first weekly increase since April, rising by one to 411 active rigs last week. This increase happened because oil prices have started to stabilize, although rig activity had previously declined sharply due to weak prices and a bearish market outlook. The price stability helped slow down the decline in rig numbers.
Source: Newsmaker.id
