Oil slips for second day with focus on geopolitical risks, Iran
BNN Bloomberg
Oil fell sharply as traders weighed ongoing tensions in Eastern Europe and the resumption of Iran nuclear talks.
Oil fell sharply as traders weighed ongoing tensions in Eastern Europe and the resumption of Iran nuclear talks.
West Texas Intermediate futures declined 2.2 per cent in New York trading on Tuesday. French President Emmanuel Macron said that he received assurances from his Russian counterpart Vladimir Putin that he would not escalate the situation further with Ukraine, while Moscow cast doubt on his comments. Additionally, Iran’s nuclear talks appeared to gain momentum.
Oil, natural gas and metals have surged in recent weeks driven by fears that Russian forces may invade Ukraine, which could spark retaliatory sanctions by the U.S. Russia has repeatedly denied any such plans.
“A lot of the geopolitical risk is priced in to crude currently so any progress, even small, could take a bit of that premium out of the price,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. “It will not induce a massive selloff unless something concrete happens, but if things are not getting worse crude starts to fade off the highs”
The possibility of more Iranian oil comes as global supply has increasingly been unable to keep up with surging demand from economies emerging from the pandemic. OPEC+ is struggling to meet its pledged output increases, in part due to outages in Libya, while traders are looking to see how much the U.S. shale patch will lift output this year.
