Brent gains on Canadian wildfires
The front-month ICE Brent contract has risen by $0.67/bbl on the day, to trade at $65.49/bbl at 09.00 GMT.
IMAGE: Getty Images
Upward pressure:
Brent futures have risen amid concerns over potential supply disruptions from Canadian wildfires and expectations that Iran will reject a US nuclear deal proposal aimed at easing sanctions on the major oil producer.
“Wildfires in Alberta, Canada, provided a boost to prices,” noted two analysts from ING Bank.
Despite a temporary relief due to wet weather, market participants still expect the wildfires—burning across Canada since May—to impact supply.
“However, this relief could be short-lived amid forecasts for drier and warmer weather towards the end of this week,” the ING analysts added.
Meanwhile, a senior Iranian diplomat told Reuters on Monday that Iran is likely to reject the US proposal to resolve the long-standing nuclear dispute between the two nations, saying the plan does not serve Iran’s interests. If US-Iran talks collapse, sanctions on Iran could remain in place, continuing to limit its oil exports and thereby supporting global oil prices.
“The market is also concerned over renewed pressure on Iranian oil exports,” said Daniel Hynes, senior commodity strategist at ANZ Bank.
Downward pressure:
The Organisation for Economic Cooperation and Development (OECD) has lowered its global economic growth forecast, projecting a slowdown from 3.3% last year to 2.9% in both 2025 and 2026.
"Global economic prospects are weakening, with substantial barriers to trade, tighter financial conditions, diminishing confidence and heightened policy uncertainty projected to have adverse impacts on growth," the OECD said in its latest report.
Concerns over global economic growth has put some downward pressure on oil prices.
By Tuhin Roy
Please get in touch with comments or additional info to news@engine.online
