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Business Recorder
6 days ago
- Business
- Business Recorder
Oil: War, wildfires and weak demand
Crude oil prices are once again caught between two conflicting narratives—tightening supply risks and weakening demand signals. As of Tuesday, Brent was hovering near $65 per barrel, having rallied nearly 3 percent since Monday. The bullish momentum is underpinned not by fundamental demand-supply imbalances, but by heightened geopolitical risk and constrained supply expectations. The sharp escalation in the Russia-Ukraine conflict is pushing markets to reassess the risk premium on crude. The possibility that hostilities may soon target energy infrastructure, including Russian oil exports, has reawakened fears that had gone dormant in recent months. With Ukraine stepping up drone strikes and Russia intensifying retaliatory measures, the spectre of energy supply disruptions is no longer remote. A direct hit to Russian oil logistics—or even the credible threat of it—could upend already delicate global supply chains. Adding fuel to the rally is Iran's likely rejection of the latest U.S. nuclear deal proposal. According to diplomatic leaks cited by Reuters, Tehran is preparing a "negative response" to Washington's terms, which would have required a halt to all uranium enrichment. The failure of negotiations all but cements Iran's pariah status in oil markets. With U.S. sanctions still in place, Iranian crude will largely remain sidelined, with China continuing to be the only major importer of its discounted barrels. Meanwhile, Canada's oil sands are feeling the heat—literally. Wildfires in Alberta have reportedly taken about 350,000 barrels per day offline, or 7 percent of the province's output. While the volume is modest in global terms, it adds to the bullish mix in a market hypersensitive to disruption headlines. Ironically, the OPEC+ meeting over the weekend was itself a bullish trigger. The cartel and its allies chose to stick with a planned 411,000 barrels-per-day increase for July—smaller than many market participants feared. With expectations of a larger hike failing to materialize, the post-meeting relief triggered a short-covering rally. As ANZ's Daniel Hynes noted, 'investors unwound their bearish positions they had built prior to the weekend's meeting.' Yet, even as supply-side anxieties dominate headlines, demand-side realities offer a sobering contrast. China's oil demand—a major pillar of global consumption—has shown unmistakable signs of cooling. According to data highlighted by Energy Tracker Asia, China's oil imports fell to a six-month low in April, reflecting sluggish industrial activity and refinery maintenance. Despite Beijing's stimulus pledges, domestic economic momentum has yet to match expectations. With petrochemical margins squeezed and exports under pressure, refiners are dialling back on crude intake. The contradiction couldn't be starker: on one hand, geopolitical risk threatens to choke supply; on the other, the world's largest importer of crude is signalling demand fatigue. Add to that a weakening U.S. dollar, which mechanically boosts commodity prices, and markets are left with a volatile, sentiment-driven setup. In the near term, the price direction of crude will be dictated more by geopolitics than by fundamentals. Any material escalation in the Russia-Ukraine war, particularly one targeting energy assets, could send prices surging above $70. Similarly, confirmation of Iran's rejection of the nuclear deal could lock out nearly 1.5 million barrels per day from re-entering the market. But lurking beneath the surface is the fragile state of global demand, especially from China. If industrial sluggishness persists and Beijing's fiscal pump-priming fails to gain traction, demand projections for H2 2025 may need to be revised downward. For now, oil sits at a precarious junction—geopolitical flames are fanning the bulls, but macroeconomic gravity may soon pull the rug from under them.
Time of India
7 days ago
- Business
- Time of India
Oil rises on Iran, Russia and Canada supply concerns
Oil prices rose in early Asia trade on Tuesday on concerns about supply, with Iran set to reject a US nuclear deal proposal that would be key to easing sanctions on the major oil producer, and with production in Canada hit by wildfires. Brent crude futures gained 55 cents, or 0.85per cent , to $65.18 a barrel by 0000 GMT. US West Texas Intermediate crude was up 59 cents, or 0.94per cent , to $63.11 a barrel, after rising around 1per cent earlier in the session. Both contracts gained nearly 3per cent in the previous session after OPEC+ agreed to keep output increases in July at 411,000 barrels per day, which was less than some in the market had feared and the same hike as in the previous two months. Geopolitical tensions supported prices on Tuesday. Iran was poised to reject a US proposal to end a decades-old nuclear dispute, an Iranian diplomat said on Monday, saying it fails to address Tehran's interests or soften Washington's stance on uranium enrichment. If nuclear talks between the US and Iran fail, it could mean continued sanctions on Iran, which would limit Iranian supply and be supportive of oil prices. The ongoing conflict between Russia and Ukraine continued to stoke supply concerns and geopolitical risk premiums. Adding to supply worries, a wildfire in the province of Alberta in Canada has prompted a temporary shutdown of some oil and gas production, which could reduce supply. According to Reuters calculations, wildfires in Canada have affected more than 344,000 bpd of oil sands production, or about 7per cent of the country's overall crude oil output. The big jump in oil prices on Monday mostly reflected relief that the Organization of the Petroleum Exporting Countries and allies, including Russia, did not go ahead with a larger production hike than in the previous two months. "With the worst fears not panning out, investors unwound their bearish positions they had built prior to the weekend's meeting," Daniel Hynes, senior commodity strategist at ANZ, said in a note.
CNBC
03-06-2025
- Business
- CNBC
Oil rises on Iran, Russia and Canada supply concerns
Oil prices rose in early Asia trade on Tuesday on concerns about supply, with Iran set to reject a U.S. nuclear deal proposal that would be key to easing sanctions on the major oil producer, and with production in Canada hit by wildfires. Brent crude futures gained 55 cents, or 0.85%, to $65.18 a barrel by 0000 GMT. U.S. West Texas Intermediate crude was up 59 cents, or 0.94%, to $63.11 a barrel, after rising around 1% earlier in the session. Both contracts gained nearly 3% in the previous session after OPEC+ agreed to keep output increases in July at 411,000 barrels per day, which was less than some in the market had feared and the same hike as in the previous two months. Geopolitical tensions supported prices on Tuesday. Iran was poised to reject a U.S. proposal to end a decades-old nuclear dispute, an Iranian diplomat said on Monday, saying it fails to address Tehran's interests or soften Washington's stance on uranium enrichment. If nuclear talks between the U.S. and Iran fail, it could mean continued sanctions on Iran, which would limit Iranian supply and be supportive of oil prices. The ongoing conflict between Russia and Ukraine continued to stoke supply concerns and geopolitical risk premiums. Adding to supply worries, a wildfire in the province of Alberta in Canada has prompted a temporary shutdown of some oil and gas production, which could reduce supply. According to Reuters calculations, wildfires in Canada have affected more than 344,000 bpd of oil sands production, or about 7% of the country's overall crude oil output. The big jump in oil prices on Monday mostly reflected relief that the Organization of the Petroleum Exporting Countries and allies, including Russia, did not go ahead with a larger production hike than in the previous two months. "With the worst fears not panning out, investors unwound their bearish positions they had built prior to the weekend's meeting," Daniel Hynes, senior commodity strategist at ANZ, said in a note.
Time of India
03-06-2025
- Business
- Time of India
Oil rises on Iran, Russia and Canada supply concerns
Oil prices saw a rise in early Asian trade on Tuesday. This increase is due to supply concerns. Iran is likely to reject a U.S. nuclear deal. This could keep sanctions in place. Production in Canada is also affected by wildfires. OPEC+ agreed to maintain output increases for July. The Russia-Ukraine conflict continues to fuel supply worries. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Oil prices rose in early Asia trade on Tuesday on concerns about supply, with Iran set to reject a U.S. nuclear deal proposal that would be key to easing sanctions on the major oil producer, and with production in Canada hit by wildfires. Brent crude futures gained 55 cents, or 0.85%, to $65.18 a barrel by 0000 GMT. U.S. West Texas Intermediate crude was up 59 cents, or 0.94%, to $63.11 a barrel, after rising around 1% earlier in the contracts gained nearly 3% in the previous session after OPEC+ agreed to keep output increases in July at 411,000 barrels per day, which was less than some in the market had feared and the same hike as in the previous two months. Geopolitical tensions supported prices on Tuesday. Iran was poised to reject a U.S. proposal to end a decades-old nuclear dispute, an Iranian diplomat said on Monday, saying it fails to address Tehran's interests or soften Washington's stance on uranium nuclear talks between the U.S. and Iran fail, it could mean continued sanctions on Iran, which would limit Iranian supply and be supportive of oil ongoing conflict between Russia and Ukraine continued to stoke supply concerns and geopolitical risk to supply worries, a wildfire in the province of Alberta in Canada has prompted a temporary shutdown of some oil and gas production, which could reduce to Reuters calculations, wildfires in Canada have affected more than 344,000 bpd of oil sands production, or about 7% of the country's overall crude oil big jump in oil prices on Monday mostly reflected relief that the Organization of the Petroleum Exporting Countries and allies, including Russia, did not go ahead with a largerproduction hike than in the previous two months."With the worst fears not panning out, investors unwound their bearish positions they had built prior to the weekend's meeting," Daniel Hynes, senior commodity strategist at ANZ, said in a note.
Yahoo
03-06-2025
- Business
- Yahoo
Oil rises on Iran, Russia and Canada supply concerns
By Anjana Anil (Reuters) - Oil prices rose in early Asia trade on Tuesday on concerns about supply, with Iran set to reject a U.S. nuclear deal proposal that would be key to easing sanctions on the major oil producer, and with production in Canada hit by wildfires. Brent crude futures gained 55 cents, or 0.85%, to $65.18 a barrel by 0000 GMT. U.S. West Texas Intermediate crude was up 59 cents, or 0.94%, to $63.11 a barrel, after rising around 1% earlier in the session. Both contracts gained nearly 3% in the previous session after OPEC+ agreed to keep output increases in July at 411,000 barrels per day, which was less than some in the market had feared and the same hike as in the previous two months. Geopolitical tensions supported prices on Tuesday. Iran was poised to reject a U.S. proposal to end a decades-old nuclear dispute, an Iranian diplomat said on Monday, saying it fails to address Tehran's interests or soften Washington's stance on uranium enrichment. If nuclear talks between the U.S. and Iran fail, it could mean continued sanctions on Iran, which would limit Iranian supply and be supportive of oil prices. The ongoing conflict between Russia and Ukraine continued to stoke supply concerns and geopolitical risk premiums. Adding to supply worries, a wildfire in the province of Alberta in Canada has prompted a temporary shutdown of some oil and gas production, which could reduce supply. According to Reuters calculations, wildfires in Canada have affected more than 344,000 bpd of oil sands production, or about 7% of the country's overall crude oil output. The big jump in oil prices on Monday mostly reflected relief that the Organization of the Petroleum Exporting Countries and allies, including Russia, did not go ahead with a largerproduction hike than in the previous two months. "With the worst fears not panning out, investors unwound their bearish positions they had built prior to the weekend's meeting," Daniel Hynes, senior commodity strategist at ANZ, said in a note.
