By Florence Tan
SINGAPORE (Reuters) – Oil prices were little changed on Monday on expectations that U.S. President-elect Donald Trump would ease sanctions on Russia’s energy sector in return for a deal to end the Ukraine war, which was tough. Eliminates concern about supply disruptions from sanctions.
Futures fell 6 cents, or 0.07%, to $80.73 a barrel by 0229 GMT after closing down 0.62% in the previous session.
U.S. West Texas Intermediate crude, which expires on Tuesday, was up 10 cents, or 0.13%, at $77.98 a barrel after falling 1.02% on Friday. The more active April contract fell 1 cent to $77.38 a barrel.
Both contracts rose more than 1% for their fourth straight weekly climb after the Biden administration cleared more than 100 tankers and two Russian oil producers. This led to an immediate scramble for oil cargoes by top buyers China and India and a rush to ship supplies as Russian and Iranian oil dealers demanded unapproved tankers to carry their loads.
At least in the near term, the new restrictions appear to reduce supply, analyst Tim Evans said in the newsletter Evans on Energy.
“Higher tanker rates on unweighted vessels and a widening lag in calendar spreads are among the significant ripple effects, reinforcing concerns over supply,” he said.
A backwardation means that spot prices will be higher in the coming months, indicating tight supply.
Prompt Brent monthly spreads rose 5 cents to $1.27 a barrel on Monday. The WTI spread was 14 cents higher at 63 cents a barrel.
While the new sanctions could affect about 1 million barrels per day of oil supplies from Russia, the recent price surge could be short-lived depending on Trump’s action, ANZ analysts said in a client note.
They said Trump has pledged to help end the Russia-Ukraine war quickly, including easing some sanctions to enable a deal.
The incoming president, who will be inaugurated later on Monday, is also widely expected to make a flurry of policy announcements in the first hours of his second term, including lifting a ban on US liquid export licenses. Also included – part of a comprehensive strategy. Strengthen the economy.
Easing tensions in the Middle East also limited oil gains.
Hamas and Israel exchanged hostages and prisoners on Sunday, marking the first day of a ceasefire after 15 months of war.
