HOUSTON: Oil prices steadied on Monday, after falling more than 4% last week, as investors looked towards talks this week between the U.S. and Russia over the war in Ukraine.
Brent crude futures slipped 14 cents, or 0.21%, at $66.45 a barrel by 11:15 a.m. EDT (1515 GMT). U.S. West Texas Intermediate crude futures fell 12 cents, or 0.19%, to $63.76.
U.S. President Donald Trump said on Friday that he would meet Russian President Vladimir Putin on August 15 in Alaska to negotiate an end to the war in Ukraine.
“The market is taking out a lot of the Russia war premium because of the expected Trump-Putin meeting, and the market is then also taking out the possibility of the reciprocal tariffs on Russian oil,” said Phil Flynn, a senior analyst with Price Futures Group.
The talks follow increased U.S. pressure on Russia, raising the prospect of tighter penalties on Moscow if a peace deal is not reached.
Trump set a deadline of last Friday for Russia, which invaded Ukraine in February 2022, to agree to peace or have its oil buyers face secondary sanctions. At the same time, Washington is pressing India to reduce purchases of Russian oil.
Oil prices have fallen in recent days as market participants lowered supply disruption estimates, probably because the U.S. imposed an extra tariff only on India rather than all buyers of Russian oil, said UBS analyst Giovanni Staunovo.
UBS has lowered its year-end Brent crude forecast to $62 a barrel from $68, citing higher supply from South America and resilient output from sanctioned countries.
Indian demand had fallen short of its expectations of late, the bank said, and it expected OPEC+ to pause its production increases unless larger unexpected supply disruptions emerge.
OPEC’s oil output rose further in July after an OPEC+ agreement to raise production, a Reuters survey found on Friday, although the hike was limited by Iraq making additional cuts and by drone attacks on Kurdish oilfields.
“The balance right now is between OPEC not raising production as much as anticipated versus the possibility that there will be a Ukraine ceasefire deal, and Russian oil might start to flow freely, that balance has oil bouncing around like a yo-yo right now,” Price Futures’ Flynn added.
Elsewhere, an Exxon Mobil-led consortium began crude production four months earlier than expected at a fourth floating production, storage and offloading vessel in Guyana, Exxon said on Friday.
Separately, data from the National Bureau of Statistics on Saturday showed China’s producer prices fell more than expected in July.
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