Crude oil prices fell again on Monday after suffering a 4.4% decline last week. Brent crude fell 0.78% to $66.07 and WTI crude to $63.30 per barrel in the Asian market. The US-Russia talks, OPEC production increase, and global economic pressure further deepened this decline.
Crude Oil: Crude oil prices continued to fall in early Asian trading on Monday, extending last week's weakness of more than 4%. Brent crude fell 0.78% to $66.07 per barrel and US WTI crude to $63.30 per barrel in the international market. OPEC's production increase, expectations of US-Russia ceasefire talks on Ukraine, and fears of a global economic slowdown put pressure on oil prices.
New Pressure After Last Week's Decline
Last week, Brent crude in the international oil market recorded a sharp decline of 4.4% and US West Texas Intermediate (WTI) crude of 5.1%. This trend continued at the beginning of this week, and both benchmark oil prices saw further declines in early trading on Monday.
US-Russia Talks
A significant reason for the pressure in the oil market is the potential peace talks between the US and Russia. US President Donald Trump has announced that he will meet with Russian President Vladimir Putin in Alaska on August 15. This meeting will be on the issue of a ceasefire in Ukraine. Investors hope that if the talks are successful, the oil export restrictions imposed on Russia could be eased, which would increase global supply and lower prices further.
Sanctions on Russian Oil and India's Position
The US has increased pressure on Russia, setting a deadline for a peace agreement. If these talks fail, additional sanctions may be imposed on countries buying Russian oil. This list also includes large importing countries like India, which may face increased pressure to reduce purchases of Russian oil.
Role of US Economic Data
IG Markets analyst Tony Sycamore said that in addition to the US-Russia talks, the US CPI (inflation) figures due out on Tuesday this week will also affect prices. If the inflation rate comes in lower than expected, the Federal Reserve may cut interest rates earlier and more aggressively, which would boost economic activity and improve oil demand.
Concerns About a Global Economic Recession
Although there is hope for a potential increase in demand, the threat of an economic recession at the global level still remains. The slowdown in industrial production in many countries, the decline in trade transactions, and weak consumer demand are having a negative impact on the energy market. This is why investors are currently taking a cautious approach.
