Trump-Led Peace Talks, Caspian Drone Strikes Cause Mild Uptick For Oil

Still, analysts are gloomy about impending market conditions: File Image/Pixabay

Oil prices on Monday enjoyed modest gains based on traders weighing conflicting forces such as looming Russia/Ukraine peace talks and a drone strike on a Caspian pump station slowing flows to Kazakhstan.

As of 7:33 GMT, West Texas Intermediate rose 65 cents to $71.39 per barrel, while Brent settled up
48 cents to $75.22 per barrel.

The Caspian Pipeline Consortium reported that drones struck the Kropotkinskaya pipeline pumping station in Russia's southern Krasnodar region, which compromised the ability of Western firms such as Chevron and Exxon Mobil to send flows from Kazakhstan to world markets.

As for the peace talks, U.S. president Donald Trump stated that he believed he could meet very soon with Russian president Vladimir Putin to discuss ending his war with Ukraine; France held an emergency meeting on the matter, and Britain stated it could send peacekeeping troops to back up a peace deal.

Still, some pundits were in a bearish mood on Monday, including Ashley Kelty, analyst at Panmure Liberum, who said, "Fundamentals still point to oversupply this year, with the market struggling to assess the potential magnitude of this due to the negative impacts of U.S. tariffs on demand growth, coupled with the potential easing of Russian sanctions."

Bloomberg agreed, noting that "Some corners are flashing signs of weakness: West Texas Intermediate's nearest futures flipped slightly Monday into a bearish structure known as contango, which signals oversupply."

However, the news agency added, "Later contracts remain in a bullish pattern."

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) was reportedly considering pushing back a series of monthly supply increases despite Trump lobbying the cartel to lower prices; however, an OPEC delegate told media that the group is unsure of how to proceed.

Also on Monday, despite gloomy analytical sentiment, Wood Mackenzie estimated that upstream oil investment needs to increase by at least 30 percent to meet upcoming demand, due to an investment gap in green energy and weakened commitment to clean energy solutions.

This dovetailed with oil trader Vitol earlier this month predicting that global oil demand will continue to rise by 2030 to nearly 110 million barrels per day (bpd).