Oil prices were largely unchanged in Asian trading on Monday as markets remained cautious ahead of potential new tariff announcements by U.S. President Donald Trump, and weighed the possibility of a peace agreement between Russia and Ukraine.
At 21:32 ET (02:32 GMT), Brent Oil Futures were largely steady at $74.76 a barrel, while Crude Oil WTI Futures expiring in March were also muted at $70.69 a barrel.
Traders cautious amid trade war fears and supply concerns
President Trump’s tariff announcements last week reignited fears of a global trade war, which could dampen economic growth and reduce demand for crude oil.
Analysts warned that escalating trade tensions between the U.S. and its trading partners, particularly China, could weigh heavily on global energy markets.
Meanwhile, Trump said on Sunday that he may meet Russian counterpart Vladimir Putin soon to discuss ending the Ukraine war, emphasizing his efforts for peace and belief that both leaders want to stop fighting.
This added to the bearish sentiment. A resolution to the conflict could lead to the lifting of sanctions on Russian oil exports, potentially increasing global supply.
Russia is one of the world’s largest oil producers, and any significant boost in its exports could offset the supply cuts implemented by OPEC+ earlier this year.
Fed comments in focus after mixed inflation
This week, financial markets are poised to closely monitor a series of speeches from Federal Reserve officials, beginning with Federal Open Market Committee members Patrick Harker and Michelle Bowman on Monday.
Their insights are particularly anticipated following last week's mixed inflation data, which revealed a 3% annual increase in the Consumer Price Index (CPI) for January, slightly above the previous month's 2.9% rate.
The unexpected rise in inflation has further tempered expectations of near-term interest rate cuts.
The trajectory of interest rates holds significant implications for the oil market. Higher rates can strengthen the U.S. dollar, making oil more expensive for holders of other currencies, and potentially dampening demand. Conversely, indications of a dovish shift could weaken the dollar, providing support to oil prices.
Source : Investing