Oil Steadies After Trade-Deal Gain as Focus Turns to Middle East
Oil steadied after three days of advances, as attention moved away from the deescalation of the US-China trade war and to the Middle East.
Brent traded above $64 a barrel, after closing 1.6% higher in the previous session, while West Texas Intermediate was near $62. Futures eased off intraday highs on Monday after President Donald Trump signaled progress in nuclear talks over the weekend between the US and Iran, boosting expectations of relaxed restrictions on Tehran’s crude in the near future.
Trump will begin his trip to the Middle East on Tuesday with a stop in Saudi Arabia, OPEC+’s de-facto leader. The kingdom has pushed for the cartel to increase production to punish non-compliant members, contributing to a drop in prices this year.
Oil has lost more than 10% since Trump first announced sweeping tariffs at the start of April, leading to retaliatory measures from trading partners including China that threatened economic growth and fuel demand. While the 90-day truce on tariffs between the top two crude consumers has offered some reprieve, the Organization of the Petroleum Exporting Countries and its allies are seen further boosting output at a June 1 meeting, adding to concerns a glut will form later this year.
“Trump’s Middle East visit this week will be in focus for any discussions on oil production policy and potential peace deals on Gaza and Ukraine,” said Vandana Hari, founder of Vanda Insights in Singapore. “The US tariff wars will remain center stage, and deals with other major trading partners could lift the mood, albeit providing a minor fillip to oil sentiment.”
Traders will also look to industry outlooks later this week for further insight into market dynamics. OPEC will publish its monthly report on Wednesday, with the International Energy Agency following the next day.
Source: Bloomberg
