By Gina Lee
Investing.com – Oil was down on Tuesday morning in Asia, with investors taking profits from the previous day’s rally and global shares fell. However, losses were minimized over mounting fears of a Russian invasion of Ukraine, which could disrupt supplies.
Brent oil futures were down 0.60% to $95.90 by 10:31 PM ET (3:31 AM GMT) and WTI futures fell 0.72% to $94.77. Both Brent and WTI futures hit their highest levels since 2014 on Monday, with Brent touching $96.78 and WTI hitting $95.82.
Fears that Russia, one of the world’s largest oil and gas producers could invade Ukraine have been behind the black liquid’s rally towards $100 per barrel.
In a “sarcastic” comment, Ukrainian President Volodymyr Zelenskiy urged Ukrainians to fly the country’s flags from buildings and sing the national anthem in unison on Feb. 16, the date that some Western media outlets cited as a possible start of a Russian invasion. However, Russia has denied plans for any attack.
“Investors scooped up profits from Monday’s rally though they were hesitant to take fresh short positions due to rising tensions in Eastern Europe,” Nissan Securities general manager of research Hiroyuki Kikukawa told Reuters.
“Oil markets may see a real correction if the Iran-U.S. nuclear deal is agreed or global equities tumble further amid worries over inflation and tighter monetary policy by central banks,” he added.
Although some investors remain positive on the outlook for oil, prices have already climbed more than 30% in less than three months. Rising inflation and interest rates also remain concerns and prompted fund managers to take some profit during the past week.
Meanwhile, talks between the U.S. and Iran to revive a 2015 nuclear deal continue. Iranian foreign minister Hossein Amir-Abdollahian said his country was “in a hurry” to reach a quick agreement in nuclear talks, providing that its national interests are protected.
Shortfalls in OPEC+ production and spare capacity concerns are also likely to keep the oil market tight and prices could hit $125 a barrel as early as the second quarter of this year, according to JP Morgan Global Equity Research.
Investors now await U.S crude oil supply data from the American Petroleum Institute, due later in the day.
Source : Investing.com