Oil Edges Higher as Supply Questions, Peace Talks Cloud Outlook
Oil edged higher in a largely aimless session amid a slew of geopolitical uncertainties, including Russia-Ukraine peace talks and a possible increase in Iraqi crude production.
West Texas Intermediate rose to $70.70 after changing direction multiple times throughout the day. Iraq may restart exports as early as this week should a pipeline to Turkey resume operations, Iraqi Oil Minister Hayyan Abdul Ghani said Monday. Markets could see as much as an additional 185,000 barrels a day, but the ministry said exports will remain within OPEC limits.
Crude wandered in a roughly $5 range for February after spiking above $80 a barrel at the beginning of the year. Prices have slid from those highs amid persistent expectations of lackluster Chinese demand, the potential for additional barrels on the market and the prospect that multiple tariff actions will weigh on global growth.
Markets are keeping a close eye on negotiations to end the three-year war in Ukraine. A settlement with Russia may pave the way for sanctions to be eased, potentially shifting export flows. Ukrainian President Volodymyr Zelenskiy said he would be ready to step down in order to guarantee peace in his country as Trump has called for Ukraine to hold elections.
Meanwhile, OPEC and its allies are expected to again delay plans to revive production as the market faces a potential surplus. More than 70% of traders and analysts surveyed anticipate that the group will postpone the first in a series of monthly increases scheduled for April.
At the same time, there have been flickers of strength in some parts of the market, with the Brent-Dubai exchange for swaps, a measure of the relative value of European and Middle Eastern crude, at its lowest since June. That indicates refiners are still eager to get their hands on the kind of heavy-sour crude barrels the region produces and supply of which has been curtailed due to the OPEC+ cuts.
WTI for April delivery rose 0.4% to settle at $70.70 barrel.
Brent for April settlement gained 0.5% to close at $74.78 a barrel.
Source : Bloomberg
