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Oil prices saw little change on Monday as markets closely watched Russia-Ukraine peace negotiations and potential U.S. tariff actions that could impact global trade.
Market Overview:
- Brent crude futures: -0.11% to $74.66 per barrel (1202 GMT)
- WTI crude futures: -0.07% to $70.69 per barrel
Key Market Drivers:
1. Russia-Ukraine Peace Talks
- U.S. President Donald Trump indicated that he could meet very soon with Russian President Vladimir Putin to discuss ending the Ukraine war.
- Initial U.S.-Russia talks are expected to take place in Saudi Arabia in the coming days.
- A potential peace agreement could ease sanctions on Russian energy exports, increasing supply and putting downward pressure on oil prices.
2. Global Trade War Concerns
- President Trump has ordered U.S. economic officials to study reciprocal tariffs on countries that impose tariffs on U.S. goods.
- Deadline for recommendations: April 1.
- If a trade war escalates, it could dampen global economic growth and reduce oil demand, limiting price gains.
3. OPEC+ Supply Strategy
- OPEC+ is considering delaying monthly supply increases set to begin in April, despite Trump’s calls for lower prices.
- However, Russia’s Deputy Prime Minister Novak denied any plans for a delay.
4. Additional Market Influences
- Weaker U.S. Dollar: The dollar index hovered near a two-month low after weaker-than-expected U.S. retail sales data. A weaker dollar makes oil cheaper for foreign buyers, supporting prices.
- Caspian Pipeline Disruptions:
- Oil flows via Caspian Pipeline Consortium (CPC) were reduced after a drone strike hit the Kropotkinskaya pumping station in Russia’s Krasnodar region.
- CPC transports Kazakh oil to Russia’s Novorossiysk port, and Ukraine has intensified drone attacks on Russian energy infrastructure.
5. U.S. Rig Count Rises
- Baker Hughes reported that U.S. energy firms added oil and natural gas rigs for the third consecutive week, signaling steady production growth.
Market Outlook
Oil prices remain range-bound as the market weighs geopolitical uncertainties, trade war risks, and OPEC+ production policies. The outcome of peace talks and trade negotiations will likely set the direction for crude prices in the coming weeks.
