Oil Incurs More Losses As OPEC Resolve Trumps Russia Deadline

Analysts doubt that Trump's proposed sanctions against Russia will have any impact:File Image/Pixabay

Oil trading maintained its predictable course on Tuesday, with worries over the Organization of the Petroleum Exporting Countries (OPEC) agreeing to another large production increase offsetting
geopolitical concerns regarding India and Russia.

Brent settled down $1.12 to $67.64 per barrel, while West Texas Intermediate settled down $1.13 to $65.16.

OPEC earlier resolved to raise output for September by 547,000 barrels per day, although delegates tried to calm fears of a supply glut by stressing that dynamic market conditions could lead to an interruption or even reversal of policy.

The geopolitical elements influencing trading focused on U.S. president Donald Trump threatening penalties against India if it continued to buy oil from Russia; New Delhi refused to comply on the grounds of protecting its economic interests, but analysts doubted the disagreement would result in a supply disruption.

Giovanni Staunovo, analyst at UBS, said, "I'd call it a stable market for oil…..assume this likely continues until we figure out what the U.S. president announces in respect to Russia later this week and how those buyers would react."

As for Trump's direct sanctions threat against Russia for not seeking peace with Ukraine, Moscow was said to be considering a pause on air strikes, and Trump was reportedly considering blacklisting Russia's so-called "shadow fleet" of oil tankers if the Kremlin doesn't agree to a ceasefire by Friday.

Joe DeLaura, global energy strategist at Rabobank, noted that "Trump's sanctions against Russia are mostly noise, as the only thing that will impact flows against a geographically large, top three oil producer with heavy economic links to India and China is a physical blockade."