Written by Florence Tan
SINGAPORE (Reuters) – Oil prices were little changed on Monday as expectations that US President-elect Donald Trump would ease restrictions on the Russian energy sector in exchange for an agreement to end the war in Ukraine outweighed fears of supply disruption due to tightening sanctions.
Futures fell six cents, or 0.07 percent, to $80.73 a barrel by 0229 GMT, after closing 0.62 percent lower in the previous session.
US West Texas Intermediate crude, which expires on Tuesday, hit $77.98 a barrel, up 10 cents, or 0.13%, after falling 1.02% on Friday. The most active April contract fell one cent to $77.38 a barrel.
Both contracts gained more than 1% in their fourth consecutive weekly rise after the Biden administration imposed sanctions on more than 100 tankers and two Russian oil producers. This led to major buyers, China and India, scrambling for fast oil shipments and a rush for ship supplies, as Russian and Iranian oil traders sought unlicensed tankers to transport their cargo.
New sanctions would squeeze supplies, at least in the near term, analyst Tim Evans said in the Evans on Energy newsletter.
“Higher tanker rates on unburdened vessels and a widening lag in calendar spreads were among the notable impacts, reinforcing concerns about supplies,” he said.
A lag indicates that spot prices are higher than they were in the coming months, indicating tight supply.
The monthly spot spread for Brent crude widened 5 cents to $1.27 a barrel on Monday. The spread of West Texas Intermediate crude reached 63 cents per barrel, an increase of 14 cents.
While new sanctions may impact supplies of nearly 1 million barrels per day of oil from Russia, recent price gains may be short-lived depending on Trump's actions, ANZ analysts said in a note to clients.
They said Trump promised to help end the war between Russia and Ukraine quickly, which could include easing some restrictions to reach an agreement.
The new president, who will be inaugurated later Monday, is widely expected to make a series of policy announcements in the first hours of his second term, including ending the moratorium on export licenses for US liquid materials – part of a broader strategy to ban the export of materials. The issue. Boosting the economy.
The easing of tensions in the Middle East also limited oil's gains.
Hamas and Israel exchanged hostages and prisoners on Sunday, the first day of a ceasefire after 15 months of war.
