Oil slips as investors monitor Russia-Ukraine ceasefire talks
Shafaq News/ Oil prices slipped on Monday as investors assessed theoutlook for ceasefire talks aimed at ending the Russia-Ukraine war, which couldlead to an increase in Russian oil to global markets.
Brent crude futures were down 25 cents, or 0.4%, at $71.91 a barrel by0409 GMT. U.S. West Texas Intermediate crude fell 20 cents, or 0.3%, to $68.08.
Both benchmarks settled higher on Friday and recorded a secondconsecutive weekly gain as fresh U.S. sanctions on Iran and the latest outputplan from the OPEC+ producer group raised expectations of tighter supply.
A U.S. delegation will seek progress toward a Black Sea ceasefire and abroader cessation of violence in the war in Ukraine when it meets for talkswith Russian officials on Monday, after discussions with diplomats from Ukraineon Sunday.
"Expectations of progress in peace negotiations between Russia andUkraine and a potential easing of U.S. sanctions on Russian oil pressuredprices lower," said Toshitaka Tazawa, an analyst at Fujitomi Securities.
"But investors are holding back on large positions as they evaluatefuture OPEC+ production trends beyond April," he added.
OPEC+ - the Organization of the Petroleum Exporting Countries and alliesincluding Russia - on Thursday issued a new schedule for seven member nationsto make further oil output cuts to compensate for pumping above agreed levels,which will more than overtake the monthly production hikes the group plans tointroduce next month.
"Ukraine-Russia ceasefire talks raise the prospects of increasedRussian exports on an eventual resolution, while the OPEC+ production hike asearly as April points to further supply additions, which may be difficult to befully absorbed by demand factors," said Singapore-based IG strategist YeapJun Rong.
OPEC+ has been cutting output by 5.85 million barrels per day, equal toabout 5.7% of global supply, agreed in a series of steps since 2022 to supportthe market.
It confirmed on March 3 that eight of its members would proceed with amonthly increase of 138,000 bpd from April, citing healthier marketfundamentals.
Market participants are also monitoring the impact from new Iran-relatedU.S. sanctions announced last week.
Market sentiment toward oil prices has improved recently givenheightened supply risks stemming from U.S. sanctions on Iranian exports andsome optimism that U.S. reciprocal tariffs may be less severe than feared,though the broader demand-supply outlook still remains mixed, IG's Yeap said.
Iranian oil shipments to China are set to fall in the near-term afternew U.S. sanctions on a refiner and tankers, driving up shipping costs, buttraders said they expect buyers to find workarounds to keep at least somevolume flowing.
(Reuters)
