Crude oil prices traded largely flat on Monday as U.S. President Donald Trump’s decision to extend the tariff deadline for trade negotiations with the European Union helped ease concerns about short-term demand disruption in global fuel markets.
However, market activity remained subdued due to the U.S. Memorial Day holiday and ongoing uncertainty surrounding OPEC+ production policy.
Brent crude oil, against which Nigerian oil is measured, held steady at $64.78 per barrel by 01:34 p.m. while U.S. West Texas Intermediate (WTI) crude edged down by four cents to $61.49 per barrel.
Earlier in the session, both benchmarks traded higher after Trump announced an extension of the EU trade negotiation deadline to July 9, temporarily averting punitive tariffs that could have weighed on energy demand across Europe.
“Trump’s pivot, by postponing higher tariffs for the EU, and his comments on possible sanctions on Russia are moderately supporting crude prices today,” said Giovanni Staunovo, analyst at UBS.
Trump also suggested on social media that new sanctions on Moscow were under consideration following Russia’s largest aerial assault in Ukraine since the start of the war, further heightening geopolitical tensions that could impact global oil flows.
Despite the initial upside, oil prices remained range-bound as Monday’s U.S. public holiday led to limited trading volumes. Broader sentiment was also capped by market anticipation of potential changes in output policy from the Organization of the Petroleum Exporting Countries and its allies (OPEC+).
OPEC+ is widely expected to increase output quotas by 411,000 barrels per day (bpd) for July, continuing the gradual unwinding of the 2.2 million bpd in voluntary cuts agreed earlier this year. Reuters reported that the alliance could fully phase out these cuts by October, having already revised targets upward by 1 million bpd for April through June.
Meanwhile, supply concerns resurfaced after Baker Hughes reported that U.S. energy firms reduced the number of operational oil rigs by eight last week, bringing the total to 465 – the lowest level since November 2021. The data points to a potential slowdown in U.S. shale output, which could tighten global supply if demand rebounds in the second half of the year.
Additionally, crude markets found support last Friday as hopes for a breakthrough in U.S.-Iran nuclear negotiations diminished. The lack of progress reduces the likelihood of Iranian crude re-entering the market in the near term, bolstering prices ahead of the holiday weekend.
Analysts at Naijaonpoint maintain a cautiously optimistic outlook for crude oil, with short-term support driven by geopolitical factors and a slower-than-expected ramp-up in supply. However, price movement remains sensitive to updates from the OPEC+ meeting and further developments in global trade negotiations.
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