Brent crude topped $105 a barrel on Monday after early losses reversed, even as Donald Trump declared an energy ceasefire between Russia and Ukraine. Attacks on Saudi Arabia and a hurricane near the US Gulf Coast kept supply concerns in play.
Oil prices reversed initial losses early Monday, despite the potential for improved supplies after U.S. President Donald Trump declared an energy ceasefire between Russia and Ukraine. Both benchmarks had fallen by around 1.5% earlier in the session.
Futures for Brent crude for December delivery rose 0.92% to $105.68 a barrel. U.S. West Texas Intermediate futures for November ticked 0.95% higher to $92.72 per barrel.
Oil reverses losses despite the ceasefire
Oil reversed its losses after Ukrainian President Volodymyr Zelenskyy welcomed the ceasefire but warned Monday that Moscow must do the same. Trump announced the truce in a social media statement on Sunday.
Hopes for more Russian energy reaching markets have also risen. Trump said Friday that Moscow will supply more than 4 million tons of diesel to the global market under a deal he struck with Putin during a phone call.
Middle East attacks and a Gulf Coast hurricane
Meanwhile, the Saudi-led coalition fighting Yemen's Iran-backed Houthis said it was dealing with another round of drones and missiles attacks directed at Saudi Arabia. Iran's foreign minister, Abbas Araghchi, then spoke by phone with his Saudi counterpart, and Al Jazeera reported he said Iran was ready to help start dialogue between Saudi Arabia and the Houthis.
Oil prices are expected to remain volatile in the near term as the U.S.-Iran conflict continues. Hurricane Isaias could also hurt supplies from U.S. energy producers.
UOB said in a note that Isaias strengthened to Category 3 with 120mph winds as it approached the US Gulf Coast, forcing producers to curtail offshore output. According to UOB, Houthi missile strikes on Riyadh airport on Saturday, which killed 12 people, "materially elevated Middle East risk premia".
Source: CNBC
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