Oil prices experienced an uptick during early Asian trading on Monday as investors assessed the potential impact of Middle East tensions on supply disruptions, while significant challenges persist in the Russia-Ukraine peace negotiations. Brent crude futures increased by 57 cents, reflecting a 0.94% rise, reaching $61.21 per barrel as of 0112. Meanwhile, U.S. West Texas Intermediate crude saw an uptick of 54 cents, or 0.95%, bringing it to $57.28. Both benchmark prices declined by over 2% on Friday as investors considered an impending global supply surplus and the potential for a peace agreement in Ukraine, in anticipation of weekend discussions between Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump.
The primary factor driving the increase in prices is the sustained elevation of geopolitical tensions, evidenced by ongoing strikes on energy infrastructure between Russia and Ukraine over the weekend. The Middle East has experienced recent turbulence, characterized by Saudi air strikes in Yemen and Iran’s declaration that the nation is engaged in a ‘full-scale war’ with the U.S., Europe, and Israel. “This may be what’s driving market concerns about potential supply disruptions,” said Yang An. U.S. President Donald Trump stated on Sunday that he and Ukrainian President Volodymyr Zelenskiy were “getting a lot closer, maybe very close” to reaching an agreement to conclude the war in Ukraine, although both leaders recognized that several of the most challenging details remain unsettled.
The two leaders convened at a joint press conference late Sunday afternoon following their meeting at Trump’s Mar-a-Lago resort in Florida. Trump stated it will be evident “in a few weeks” if negotiations to conclude the war will be successful. The peace talks yielded favorable outcomes. Nonetheless, a breakthrough eluded the parties involved, as a substantial obstacle persists regarding the territorial control of the Donbas region, according to analyst Tony Sycamore.
Crude oil is anticipated to fluctuate within a range of $55 to $60, while also considering US enforcement actions regarding Venezuelan oil shipments and potential repercussions from the US military strike on ISIS targets in Nigeria, a country that produces approximately 1.5 million barrels per day, according to a note.