Brent declines as US-Russia summit approaches
The front-month ICE Brent contract has declined by $0.37/bbl on the day from Friday, to trade at $66.28/bbl at 09.00 GMT.
IMAGE: Oil storage tanks. Getty Images
Upward pressure:
Brent futures have gained support from rising demand growth expectations.
Last week, the US Energy Information Administration (EIA) reported a 3 million-bbl draw in crude oil inventories. A decline in US crude stocks often signals stronger demand and can lend support to Brent, according to analysts.
Expectations of demand growth from China have provided additional support to oil prices. The country’s daily crude oil imports averaged 11.12 million b/d in July, up 11.5% year-on-year.
Downward pressure:
Brent crude’s price has come down, as the market shifted its focus to the highly anticipated meeting between US President Donald Trump and Russian President Vladmir Putin.
“If we do see some level of de-escalation, it would remove sanction risk from the oil market. This would likely drive prices lower, given the bearish fundamentals,” said two analysts from ING Bank.
The two leaders are set to meet in Alaska on 15 August to discuss a Russia-Ukraine peace deal, though Ukrainian President Volodymyr Zelenskyy has yet to receive an official invitation to the summit.
“News of a Ukraine summit between US President Donald Trump and Russian President Vladimir Putin on August 15 in Alaska prompted growing relief over oil supply stability,” remarked VANDA Insights’ founder Vandana Hari.
By Aparupa Mazumder
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