Oil Price Fundamental Daily Forecast – Potential Easing of Tensions in Middle East Weighing on Prices
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading mixed on Monday shortly after the regular session opening. Volume is low as investors digest the developments from over the week-end that suggest an easing of the tensions in the Middle East. Concerns over the health of the global economy are also weighing on prices.
At 12:15 GMT, September WTI crude oil futures are trading $56.28, up 0.08 or +0.16% and October Brent crude oil futures are at $63.34, down $0.03 or -0.08%.
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Middle East Tensions
Tensions remain high in the Middle East as Iran refused to release a British-flagged tanker it seized but granted India consular access to 18 Indian crew members.
In the meantime, it’s being reported that Denmark welcomed the British government’s proposal for a European-led naval mission to ensure safe shipping through the Strait of Hormuz, the world’s most important oil passageway. Additionally, the United States is also working on a multinational maritime security initiative in the Gulf.
Over the weekend, an emergency meeting with parties to Iran’s 2015 nuclear deal was called constructive by Iranian official Abbas Araqchi on Sunday. Nonetheless, the meeting ended with unresolved issues and Tehran said it would continue to reduce its nuclear commitments if Europeans fail to salvage the pact. The United States did not include the United States.
Other News
The U.S. and China are scheduled to begin another round of trade talks this week. Expectations for progress during the two-day Shanghai meeting are low. Traders are blaming the long dispute between the two economic powerhouses for slowing down growth outside of the United States that is essentially forcing the Fed to lower rates later this week.
According to Baker Hughes, U.S. energy companies last week reduced the number of oil rigs operating for a fourth week in a row, putting the rig count down for an eighth consecutive month.
Daily Forecast
In the absence of fresh developments in the Middle East, prices are likely to drift until late Tuesday when the American Petroleum Institute reports its weekly inventories figures.