Key Takeaways
- Brent crude futures fell by 1.47% to $103.18 a barrel.
- US President Donald Trump announced Russia would supply over 1 million tons of diesel to global markets.
- Middle East conflict continues to support Brent crude prices above $100 a barrel.
Oil prices slipped on Monday, with Brent crude futures dropping by 1.47% to $103.18 a barrel by 0154 GMT, while US West Texas Intermediate crude fell to $90.31 a barrel.
The reduction in oil prices came on the heels of US President Donald Trump's announcement that Ukraine and Russia had agreed to halt attacks on each other’s energy facilities, following a US diesel-supply deal with Moscow.
According to Trump, Russia would supply more than 300,000 metric tons (2.25 million barrels) of diesel to the US and global markets immediately, with additional supplies of 500,000 tons in November and a further 1 million tons ‘immediately thereafter’.
The International Energy Agency forecasts global daily diesel consumption at close to 29 million barrels, suggesting the potential impact of the Russian supply increase.
However, the announcements did not go unchallenged. Ukrainian President Volodymyr Zelenskiy stated he was still waiting to see the details of the energy ceasefire, while Russia did not comment.
Tim Waterer, chief analyst at KCM Trade, noted that questions remain over the validity and longevity of any such ceasefire, and that the extent of the pullback in oil prices is likely to stay limited without clearer evidence that it will hold.
The Middle East conflict continued to support Brent crude prices, with the Houthis claiming responsibility for a strike on Riyadh’s international airport that killed 13 people and wounded over 300.
Saudi authorities reported that people were injured in a new attack on the airport, while more attacks on tankers sailing through the Strait of Hormuz have been reported this month, threatening a recovery in Middle East crude exports.
Goldman Sachs raised its Brent crude price forecast for December to $90 a barrel, up from $85 previously, citing the potential for continued adaptation of Middle East supply to eventually reduce crude oil prices.
