Global oil prices edged lower on Monday as investors weighed the potential outcome of ceasefire talks aimed at ending the Russia-Ukraine conflict, which could result in increased Russian oil supply to global markets.
Brent crude futures slipped 25 cents, or 0.4 per cent, to $71.91 a barrel by 0409 GMT, while U.S. West Texas Intermediate crude dropped 20 cents, or 0.3 per cent, to $68.08, according to Reuters.
Both benchmarks had settled higher on Friday, marking a second straight weekly gain.
The rise was driven by fresh U.S. sanctions on Iran and OPEC+’s latest output plan, which boosted expectations of tighter global oil supply.
A U.S. delegation is set to meet with Russian officials on Monday to pursue progress toward a Black Sea ceasefire and a broader halt to hostilities in the Ukraine war, following talks with Ukrainian diplomats on Sunday.
“Expectations of progress in peace negotiations between Russia and Ukraine and a potential easing of U.S. sanctions on Russian oil pressured prices lower.
“But investors are holding back on large positions as they evaluate future OPEC+ production trends beyond April,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
On Thursday, OPEC+ — which includes the Organization of the Petroleum Exporting Countries and its allies like Russia — announced a new plan requiring seven member nations to make extra oil output cuts to make up for exceeding production limits. These additional cuts will outweigh the group’s scheduled production increases set for next month.
“Ukraine-Russia ceasefire talks raise the prospects of increased Russian exports on an eventual resolution, while the OPEC+ production hike as early as April points to further supply additions, which may be difficult to be fully absorbed by demand factors,” said Singapore-based IG strategist Yeap Jun Rong.
OPEC+ has been reducing oil output by 5.85 million barrels per day—around 5.7% of global supply—through a series of agreements since 2022 aimed at supporting the market.
The group confirmed on March 3 that eight of its members will begin increasing output by 138,000 barrels per day each month starting in April, citing stronger market conditions.
