Oil Fluctuates Ahead of US-Iran Talks in Geneva
Oil prices fluctuated at the start of the week, as market participants monitored geopolitical risks ahead of the continuation of talks between the United States and Iran, expected to take place on Tuesday in Geneva. The market tended to hold positions, as the outcome of the negotiations was seen as potentially influencing risk premiums and price direction in the near term.
Brent crude traded near $68 per barrel after recording its first consecutive weekly decline this year, while WTI held around $63 per barrel. Market attention was also drawn to reports that Iran's Revolutionary Guard Corps was conducting naval exercises in the Strait of Hormuz, a vital waterway that transports about a fifth of the world's oil supply.
Politically, US President Donald Trump's statement calling "regime change" the best outcome for Iran increased pressure on Tehran ahead of the talks. The combination of military exercises and political rhetoric increased market sensitivity to geopolitical headlines, especially given the region's significant role in global energy supplies.
Trading activity was expected to be thin due to holidays in the US and Canada on Monday and the Lunar New Year holiday in China throughout the week. Reduced liquidity has the potential to make prices more volatile, even without major fundamental changes.
Year-to-date, oil has rallied more than 10% due to rising tensions with Iran and potential supply disruptions in a region that accounts for about a third of global oil production, overcoming concerns about a global oversupply. However, some of those gains were eroded as the risk of an imminent attack eased and after the International Energy Agency (IEA) cut its demand growth forecast for this year.
Analysts believe the outcome of the US-Iran talks will be a key factor. If tensions ease, Brent could potentially fall back toward the $60 area. At the same time, market attention is also focused on US-led talks to end the war in Ukraine, scheduled to begin Tuesday in Geneva, although the chances of a quick conclusion are considered slim. At the last update, April Brent rose slightly to $67.87 per barrel (11:36 a.m. London time), while March WTI was at $62.98 per barrel. (alg)
Source: Newsmaker.id
