Oil prices fall ahead of G7 negotiations on new Russian sanctions


London — Oil prices fell during a volatile session on Monday. Investors have been waiting for a move against Russia’s oil and gas exports that could emerge from the German G7 summit.

Supply is even tighter as G7 leaders were expected to discuss the resurgence of Iran’s nuclear trade, but the Western government sought ways to reduce Russia’s ability to fund the war in Ukraine. The outlook was approaching the market. export.

But so far, imminent supply concerns have outweighed growing concerns about the possibility of a global recession following a series of weak economic data from the United States, the world’s largest oil consumer.

Brent crude futures fell 28 cents to $ 112.84 a barrel by 0932 GMT after a 2.8% rebound on Friday. US West Texas intermediate crude fell 45 cents (0.42%) at $ 107.17 a barrel after rising 3.2% in the previous session.

Both contracts fell for the second straight week last week as interest rate hikes in major countries strengthened the dollar’s appreciation and fueled concerns about a recession.

However, oil prices are well supported above $ 100 a barrel and monthly spread backwardation remains wide. Backwardation indicates that the market structure is when the rapid futures price is higher than the delivery price for later months and the supply is limited.

“It looks like there’s a macro-fundamental battle right now,” said Warren Patterson, head of product research at ING. “As we’ve seen prices squeeze, time spreads have tightened, suggesting that the market is still tight.”

G7 leaders, who met on Sunday, are expected to work on rising energy prices and discuss options to replace Russia’s oil and gas imports and further sanctions that will not exacerbate inflation.

French presidential officials said the G7 would also discuss prospects for reviving Iran’s nuclear negotiations after the European Union’s foreign policymaker met with senior Tehran officials in an attempt to lift the blockade of stagnant negotiations.

Ron Busso

Reuters

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