Oil gains as investors weigh Middle East tensions
[BEIJING] Oil prices rose in early Asian trading on Monday (Dec 29) as investors weighed Middle East tensions that could disrupt supply, while a major hurdle remains in the Russia-Ukraine peace talks.
Brent crude futures rose 57 US cents or 0.94 per cent to US$61.21 per barrel by 0112 GMT, while US West Texas Intermediate (WTI) crude was up 54 US cents or 0.95 per cent to US$57.28.
Both benchmark prices fell more than 2 per cent on Friday as investors weighed a looming global supply glut and the possibility of a Ukraine peace deal ahead of weekend talks between Ukrainian President Volodymyr Zelensky and US President Donald Trump.
“The main reason prices are rising is that geopolitical tensions remain elevated, as Russia and Ukraine continued striking each other’s energy infrastructure over the weekend.
“The Middle East has also been unsettled recently, with Saudi air strikes in Yemen and Iran saying the country is in a ‘full-scale war’ with the US, Europe, and Israel. This may be what’s driving market concerns about potential supply disruptions,” said Yang An, analyst at Haitong Futures.
US President Donald Trump said on Sunday that he and Ukrainian President Volodymyr Zelensky were “getting a lot closer, maybe very close” to an agreement to end the war in Ukraine, though both leaders acknowledged that some of the thorniest details remain unresolved.
The two leaders spoke at a joint press conference late Sunday afternoon after meeting at Trump’s Mar-a-Lago resort in Florida. Trump said it will be clear “in a few weeks” whether negotiations to end the war will succeed.
The peace talks were positive. However, there was no breakthrough, and a significant hurdle remains in the form of territorial control of the Donbas region, said IG’s analyst Tony Sycamore.
Crude oil is expected to trade within a US$55 to US$60 type range with an eye also on US enforcement actions against Venezuelan oil shipments and any fallout from the US military strike against ISIS targets in Nigeria, which produces about 1.5 million barrels per day, IG said in a note. REUTERS
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