Commodities News

Oil Down but Worries Remain over Ukraine and Iran

By Gina Lee – Oil was down on Monday morning in Asia but tensions in Ukraine and a hold up in Iran’s nuclear deal discussions cast a long shadow.

Brent oil futures fell 0.59% to $90.85 by 10:10 PM ET (3:10 AM GMT) and WTI futures slid 0.64% to $89.63.

The U.S. believes that a Russian invasion of Ukraine would see it target multiple cities beyond the capital Kyiv, according to three people close to the matter. Moscow has said that its forces would remain in Belarus indefinitely, despite repeated denials of an invasion.

In the interim, negotiations in Vienna with Iran rekindle the 2015 nuclear agreement have reached an impasse despite Germany’s chancellor cautioning that it’s now or never to save the accord. A successful deal would mean more supplies from Iran.

Crude surged to the highest level since 2014 last week. The increased tensions in Ukraine crisis come amid soaring global demand, supply interruptions, and declining stockpiles. A Russian invasion and subsequent retaliatory U.S.-led sanctions could upset global energy supplies.

With that in mind, oil prices could set fresh demand records this year for a “prolonged period” above $100 a barrel over the next six to nine months, Vitol Group Chief Executive Officer Russell Hardy told Bloomberg. It would add to global inflationary pressures as leading economies extend their recovery from the pandemic.

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