Oil costs maintain regular as buyers monitor Russia-Ukraine ceasefire talks

By Yuka Obayashi

TOKYO (Reuters) – Oil costs held regular on Monday as buyers assessed the outlook for ceasefire talks geared toward ending the Russia-Ukraine battle, which might result in a rise in Russian oil to world markets.

Brent crude futures had been down 8 cents, or 0.1%, at $72.08 a barrel by 0046 GMT. U.S. West Texas Intermediate crude fell 5 cents, or 0.1%, to $68.23.

Each benchmarks settled larger on Friday and recorded a second consecutive weekly acquire as contemporary U.S. sanctions on Iran and the most recent output plan from the OPEC+ producer group raised expectations of tighter provide.

A U.S. delegation will search progress towards a Black Sea ceasefire and a broader cessation of violence within the battle in Ukraine when it meets for talks with Russian officers on Monday, after discussions with diplomats from Ukraine on Sunday.

“Expectations of progress in peace negotiations between Russia and Ukraine and a possible easing of U.S. sanctions on Russian oil pressured costs decrease,” mentioned Toshitaka Tazawa, an analyst at Fujitomi Securities.

“However buyers are holding again on giant positions as they consider future OPEC+ manufacturing traits past April,” he added.

OPEC+ – the Group of the Petroleum Exporting International locations and allies together with Russia – on Thursday issued a brand new schedule for seven member nations to make additional oil output cuts to compensate for pumping above agreed ranges, which is able to greater than overtake the month-to-month manufacturing hikes the group plans to introduce subsequent month.

Nonetheless, Kazakhstan’s oil output has reached a report excessive this month on the again of oilfield enlargement, additional exceeding OPEC+ manufacturing quotas, two business sources mentioned and Reuters calculations confirmed on Friday.

OPEC+ has been chopping output by 5.85 million barrels per day, equal to about 5.7% of world provide, agreed in a collection of steps since 2022 to assist the market. It confirmed on March 3 that eight of its members would proceed with a month-to-month improve of 138,000 bpd from April, citing more healthy market fundamentals.

Market contributors are additionally monitoring the affect from new Iran-related U.S. sanctions introduced final week.

Iranian oil shipments to China are set to fall within the near-term after new U.S. sanctions on a refiner and tankers, driving up delivery prices, however merchants mentioned they count on patrons to seek out workarounds to maintain at the least some quantity flowing.

In the meantime, U.S. vitality corporations this week added oil and pure fuel rigs for the primary time in three weeks, vitality providers agency Baker Hughes mentioned in a report on Friday.

(Reporting by Yuka Obayashi; Enhancing by Christopher Cushing)