Oil prices fell on Monday as concerns about fuel demand in the United States and China outweighed the impact of OPEC+ cuts and the US purchasing oil for reserves. Brent crude futures were down by 0.84% to $73.55 a barrel, while US West Texas Intermediate crude was at $69.48 a barrel, down by 0.8%.
The possibility of a US recession with a significant risk of a historic default caused both benchmarks to fall for the fourth consecutive week last week. Although the OPEC+ grouping’s reduction of sour crude availability is expected to tighten global crude supplies in the second half of the year, Iraq does not anticipate further cuts to oil output in OPEC+’s June meeting.
Meanwhile, the leaders of the Group of Seven (G7) could announce new measures to target sanctions evasion involving third countries and to undermine Russia’s future energy production. The leaders are expected to discuss various issues, including the ongoing coronavirus pandemic, climate change, and geopolitical tensions.
The latest developments in oil prices are a reflection of the ongoing challenges in the global energy markets, and the current uncertainty regarding the pace of economic recovery in major oil-consuming countries is weighing on oil prices.
Additionally, tensions between the US and Russia, coupled with the possibility of sanctions, could further impact global oil prices. Any new measures announced by the G7 leaders could also have significant implications for the global energy markets.
The ongoing developments in the energy markets highlight the need for a coordinated global response to the challenges facing the industry. Governments and industry stakeholders must work together to ensure a stable and sustainable energy future, taking into account the need to balance economic growth, environmental concerns, and geopolitical tensions.