Oil Edges Lower With Ukraine War Talks, US Outlook in Focus
Oil edged lower, with talks to end the war in Ukraine and a reduction of the US credit rating in focus.
Brent fell as much as 1.1% to near $65 a barrel, while West Texas Intermediate traded near $62. Risky assets were generally weaker after Moody’s Ratings stripped the US government of its top credit rating. The downgrade, which trailed other major agencies, risks reinforcing Wall Street’s growing worries over the US sovereign bond market and a slowing economy.
In addition, President Donald Trump and Vladimir Putin will speak by phone on Monday, although the Russian leader may believe he has the upper hand in the fighting and therefore be unlikely to make concessions.
“While down this morning, Brent crude is surprisingly not shedding all that much value given the rather bearish backdrop of US equity futures in the red,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. “A lower oil price and a softer dollar will likely bolster global oil demand versus very bearish expectations.”
Iran, meanwhile, won’t abandon its pursuit of civilian nuclear energy under any circumstances, President Masoud Pezeshkian said in aired remarks on state television. His comments come as the rhetoric between Iranian and US officials intensified in recent days.
Crude prices rebounded over the previous two weeks on increased uncertainty over the progress of US-Iranian talks and following Israel’s strikes on Houthi-held areas of Yemen that have elicited promises of retaliation. Futures are still down more than 10% this year as Trump’s trade war threatens demand and OPEC+ returns shuttered production into a market that is forecast to be oversupplied later this year.
Source: Bloomberg
