Oil Falls as Risk-Off Mood Shifts Focus From Russia Sanctions
Oil retreated as risk-averse sentiment pervaded global markets and overshadowed fresh signs that US sanctions on Russia have upended some crude flows.
West Texas Intermediate traded below $60 a barrel on Tuesday after closing slightly lower a day earlier. Broader financial markets carried a risk-off tone, hurting many commodities. The S&P 500 fell more than 1%, heading toward its longest slide since August, on a slew of disappointing earnings results.
The decline in oil erased earlier gains after Russia’s flagship crude plunged to the lowest in more than two years, with just days to go before US sanctions take effect against giant producers Rosneft PJSC and Lukoil PJSC, while major Asian buyers paused at least some purchases.
“Crude futures are actually holding up well” amid a major sell-off in wider markets, said Dennis Kissler, senior vice president for trading at BOK Financial. He credited that resilience to traders taking US sanctions against Russia “more seriously” as evidence of shifting trade flows piles up.
US benchmark futures are down this year as expectations for a glut weigh on the outlook, with the International Energy Agency forecasting a record surplus in 2026. The oversupply is being driven by the return of idled output from OPEC and its allies, as well as more supplies from outside of the group.
On Monday, US President Donald Trump said he isn’t ruling out sending troops into Venezuela, but that he is also willing to speak with the country’s leader, Nicolas Maduro. The US has massed a military presence near the OPEC member in recent weeks.
Diesel prices remain a cornerstone of strength in the market, with the difference between the two nearest ICE gasoil contracts surging on Tuesday. Its the second such move this month and offers a sign that supplies of the barrels that underpin Europe’s diesel benchmark are tight.
WTI for December delivery traded at $59.63 a barrel as of 10:29 a.m. in New York. Brent for January was little changed at $63.84.
Source : Bloomberg.com
