Quantum Commodity Intelligence – Crude oil futures in European hours Monday were slightly lower, as broader demand concerns offset geopolitical tensions.
Front-month Jan25 ICE Brent futures were trading at $74.92/b (1105 GMT), compared to Friday’s settle of $75.17/b and sitting just off recent two-week highs.
At the same time Jan25 NYMEX WTI was trading at $70.93/b, versus Friday’s settle of $71.24/b.
Oil benchmarks have gained more than 5% over the past week, underpinned by spiralling events in the Russia/Ukraine conflict, although so far energy exports have not been disrupted by recent events.
Tensions ramped up last week after President Putin signed an amendment to Russia’s nuclear doctrine, widening the scope for Moscow to use nuclear weapons.
“This escalation has raised geopolitical tensions beyond levels seen during the year-long conflict between Israel and Iran-backed militants,” said Ole S Hansen, Head of Commodity Strategy at Saxo Group, noting the broader commodities complex posted the highest weekly gains since April.
Meanwhile, the threat of tighter sanctions against Iranian oil ratcheted up after the collapse of a deal that would limit Iran’s stockpiles of enriched uranium.
Additionally, markets were given a leg-up by improved refining margins and soaring natural gas prices, with the US and Europe hit by early-winter cold snaps.
However, broader fundaments continued to work against oil amid a backdrop of lacklustre demand growth from China and Europe, while non-OPEC+ production continues to increase.