West Texas Intermediate (WTI) crude oil prices opened the week on a weaker footing, retreating from a two-day rally that had lifted prices to a near two-week high above $64.00. As of Monday, WTI is trading around $62.80 per barrel, down approximately 1.5% on the day, as fading concerns over supply disruptions weigh on sentiment.
The renewed momentum toward a potential US-Iran nuclear agreement has amplified expectations of increased global oil supply. On Saturday, Washington and Tehran agreed to initiate expert-level talks aimed at formulating a framework for a nuclear deal. These discussions are set to begin Wednesday in Oman, with a follow-up session planned for Saturday to assess progress. The prospect of Iranian crude re-entering the global market has put downward pressure on oil prices.
Further dampening the market’s risk premium was Russian President Vladimir Putin’s announcement of a one-day ceasefire in Ukraine over the weekend. The move has sparked hopes of de-escalation and potential diplomatic progress, easing geopolitical tensions that have been underpinning oil prices.
Despite the bearish undertone, continued weakness in the US dollar is offering some support to the commodity. A softer dollar typically benefits dollar-denominated assets like crude oil by making them more attractive to holders of other currencies.
Analysts caution against drawing firm conclusions just yet, noting that a sustained break below current levels is needed to confirm that the recent rebound from a four-year low has stalled. Market participants are also likely to wait for this week’s flash Purchasing Managers’ Index (PMI) releases, which may provide clearer insights into global economic momentum and potential direction for oil prices.
