Oil Holds Gain as Trump’s Russia Deadline Raises Supply Concerns
(Bloomberg) -- Oil held a gain after President Donald Trump pushed for Russia to reach a swift truce with Ukraine or face potential economic penalties, raising concerns crude supplies from the OPEC+ producer could be disrupted.
Brent was near $70 a barrel after closing 2.3% higher in the previous session, the biggest increase in two weeks. West Texas Intermediate traded around $67. Trump said he would impose a new deadline of 10-12 days for Moscow to end hostilities, warning of “secondary sanctions” if a deal isn’t agreed.
“There will be a sizeable part of the market questioning whether Trump will really follow through with his secondary tariff threats” given the US president’s desire for lower oil prices, said Warren Patterson, head of commodities strategy at ING Groep NV in Singapore. Still, their implementation could “dramatically shift” the outlook for the market, he added.
Trump’s action follows the latest round of sanctions by the European Union on Russia, which included penalties on India’s Nayara Energy. Global markets are also focused on the US deadline for trade deals by Aug. 1, and the upcoming OPEC+ meeting that will decide supply policy for September.
Oil is heading for a monthly gain on signs of tight stockpiles in some regions and robust demand during the Northern Hemisphere summer, the peak season for consumption. Still, the market is on track for a glut toward the end of the year as OPEC and its allies keep adding barrels.
On Russia, Trump expressed frustration on Monday with President Vladimir Putin for rebuffing previous calls for a ceasefire. The US president initially gave Moscow 50 days for a truce, which would have fallen on Sept. 2.
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