Oil prices steadied on Monday following 6% gains last week, with mounting tensions between Western powers and major oil producers Russia and Iran raising fears of supply disruptions and keeping a floor under prices.
Brent crude futures fell 0.34%, or 26 cents, to $74.91 a barrel by 0931 GMT, while U.S. West Texas Intermediate crude futures were at $70.89 a barrel, down 35 cents, or 0.49%.
Both contracts last week notched their biggest weekly gains since late September after Russia fired a hypersonic missile at Ukraine in a warning to the United States and Britain following strikes by Kyiv on Russia using U.S. and British weapons.
“Oil prices are starting the new week with some slight cool-off as market participants await more cues from geopolitical developments and the Fed’s policy outlook to set the tone,” said Yeap Jun Rong, market strategist at IG.
In addition, Iran reacted to a resolution passed by the U.N. nuclear watchdog on Thursday by ordering measures such as activating various new and advanced centrifuges used in enriching uranium.
“The likelihood for removal of some Iranian supplies has increased following the censure of Iran over its nuclear programme and the regime’s agreement to hold talks suggests that the U.S. will enforce sanctions – this could remove around 1mmbopd of supply,” said Panmure Liberum analyst Ashley Kelty.
The Iranian foreign ministry said on Sunday that it will hold talks about its disputed nuclear programme with three European powers on Nov. 29.
Markets are also expected to move this week ahead of the OPEC+ meeting on Dec.1, where the group may stick with deep oil cuts for longer due to weak demand.
“The OPEC+ summit on December 1, will further postpone the start of the planned production increases until February. Pushing back the start until Q2 or later is another possibility that would add even more support,” said Tim Evans, an independent energy analyst.
Investors were also focused on rising crude oil demand in China.
China’s crude imports rebounded in November as lower prices drew stockpiling demand. Chinese crude imports are likely to be further lifted by an additional import quota of at least 5.84 million metric tons (116,800 bpd) issued to independent refiners for cargoes arriving into next year, people familiar with the situation said on Monday.
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