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Copper Tip Energy

Oil Extends Decline With Geopolitical Tensions Seen Easing

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These translations are done via Google Translate

Feb 8, 2022


Oil fell sharply as traders weighed the risks to the market’s recent rally, including a potential de-escalation in tension over Ukraine and the resumption of Iran nuclear talks.

Futures in New York declined as much as 2.5%. French President Emmanuel Macron said that he got assurances from his Russian counterpart Vladimir Putin that there would be no “escalation.” He didn’t elaborate, and the Kremlin didn’t confirm Macron’s assessment.

The crisis over Ukraine has contributed to surging prices of oil, natural gas and metals in recent weeks after Western nations warned of a possible invasion. Russia has repeatedly denied any such plans.

Oil’s drop on Tuesday also came after Russia’s chief nuclear negotiator Mikhail Ulyanov told the Moscow newspaper Kommersant that talks to revive the Iranian nuclear accord are at the finish line with a final document on the table.The possibility of more Iranian oil comes just as global supply has increasingly been unable to keep up with surging demand with economies emerging from the pandemic. OPEC+ is struggling to meet its pledged output increases, in part due to outages in Libya, while traders are looking to see how much the U.S. shale patch will lift output this year.


That’s strengthened the market dramatically over the past few months, and put $100 a barrel within reach. The physical market has also rallied, with benchmark Dated Brent in the North Sea assessed by S&P Global Platts at more than $98 a barrel on Monday, traders said.

“There’s a lot of uncertainty,” BP Plc Chief Executive Officer Bernard Looney said in a Bloomberg TV interview. “We’ve got what’s going to happen with Iran, we’ve got what’s going to happen with the shale response in North America, we’ve got concerns in Libya.”

  • West Texas Intermediate for March slid 2% to $89.54 a barrel at 11:04 a.m. in London
  • Brent for April dropped 2.1% to $90.75

The market was also weighing disruption at a number of U.S. oil refineries after a bout of cold weather. Those affected include the nation’s second-largest, potentially disrupting both crude intake and oil-product deliveries.

Other market news:
  • BP Plc boosted share buybacks after higher oil and gas prices delivered a big rise in fourth-quarter profit.
  • Russia’s Urals crude is struggling to keep up with a surge in headline prices after traders snapped up supplies of comparable oil before the nation’s own barrels were available for purchase.
  • Oil executives tempted by the prospect of the highest crude prices in seven years are showing all the signs of abandoning pledges to hold the line on drilling budgets, Citigroup Inc. said.

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