Oil Down at Open of Week
Oil fell as traders worried about the impact of the U.S.-led trade war on energy demand, while monitoring talks between Washington and Tehran over the Islamic republic’s nuclear program.
Brent fell as much as 2% to below $67 a barrel, while West Texas Intermediate neared $63. Data showing how President Donald Trump’s trade policies are affecting the global economy could provide fresh evidence of a slowdown, including a revised outlook from the International Monetary Fund.
Iran’s foreign minister said his country had a “better understanding” with the U.S. on principles after Saturday’s talks on Tehran’s nuclear program. The discussions, which lasted more than three hours, are set to resume Wednesday in Oman, potentially affecting Iran’s crude supplies. “Everything is showing signs of pessimism — from macro, fundamentals, to geopolitics,” said Gao Jian, an analyst at Qisheng Futures Co. “Concerns over economic recession remain the main risk.
Oil prices have plunged sharply this month, hitting a four-year low at one point, driven by investor concerns that tariffs and counter-levies between the U.S. and its biggest trading partners including China would dent demand for crude. The decline was compounded by OPEC+’s decision to restore output at a faster-than-expected pace, which revived concerns about a supply glut.
“The nuclear talks between the U.S. and Iran appear to be going relatively well, helping to ease the considerable supply risk hanging over the oil market,” said Warren Patterson, Singapore-based head of commodity strategy at ING Groep NV. “It’s early days, but the fact that further talks are planned suggests that we’re at least heading in the right direction.” Trading volumes may be lighter than usual on Monday, with several countries celebrating Easter. At the same time, contango — a bearish pattern — has returned to part of the futures curve, with some longer-dated futures trading above their nearer-dated counterparts.
Meanwhile, in Ukraine, President Volodymyr Zelenskiy accused Kremlin forces of violating an Easter cease-fire declared by Russian President Vladimir Putin. The US has previously proposed to allies the possibility of easing sanctions on Russia if a lasting ceasefire is achieved.
Source: Bloomberg
