Oil prices extended losses in Asian trading on Monday as investors positioned cautiously ahead of the scheduled August 15 meeting between U.S. President Donald Trump and Russian President Vladimir Putin in Alaska to discuss the war in Ukraine.
Brent crude oil, against which Nigerian crude oil is priced, fell 62 cents or 0.93% to $65.97 a barrel as of 07:31 a.m. in Nigeria, while U.S. West Texas Intermediate (WTI) crude dropped 69 cents or 1.08% to $63.19 a barrel.
The declines follow last week’s 4.4% fall in Brent and a 5.1% drop in WTI, driven by concerns over global demand and the geopolitical outlook.
Market sentiment has shifted on expectations that sanctions restricting Russian oil exports could be eased if peace negotiations yield results.
However, analysts warn that failure to reach an agreement could trigger a reversal in sentiment.
“If peace talks falter and the conflict drags on, the market could quickly pivot to a bullish stance, potentially triggering a sharp rally in oil prices,” said Sugandha Sachdeva, founder of SS WealthStreet.
The talks also come amid heightened U.S. pressure on Moscow, with Washington signalling that secondary sanctions could be imposed on Russian oil buyers if a deal is not reached.
India, one of Russia’s key crude buyers, is reportedly facing pressure from Washington to scale back purchases.
Consultancy Energy Aspects estimated that Indian refiners have already secured 5 million barrels of WTI for August loadings with an additional 5 million barrels possible depending on tender outcomes and another 5 million barrels for September.
Broader market sentiment remains fragile due to macroeconomic concerns. Trump’s recently implemented higher tariffs on imports from dozens of countries are expected to disrupt supply chains and raise inflation, adding pressure on global growth.
“The near-term direction will hinge on several key events, including the August 15 meeting between the U.S. and Russian presidents, upcoming speeches from Federal Reserve officials, and the release of the U.S. CPI data,” Sachdeva added.
Data from China’s National Bureau of Statistics over the weekend showed producer prices fell more than expected in July, while consumer prices remained flat, underscoring weak domestic demand and persistent trade uncertainty.
The combination of geopolitical risk and economic headwinds continues to weigh on oil with traders watching closely for developments that could alter the supply-demand balance in the weeks ahead.