Oil prices fell on Monday in Asian trading, extending last week's more than 4% decline, as investors awaited the results of talks between the US and Russia on Russia's war against Ukraine, which will take place later this week, UNN reports with reference to Reuters.
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Brent crude futures fell 33 cents, or 0.5%, to $66.26 a barrel by 04:30 GMT (07:30 Kyiv time), while US West Texas Intermediate crude futures fell 39 cents to $63.49.
Expectations of a possible lifting of sanctions restricting the supply of Russian oil to world markets intensified after US President Donald Trump said on Friday that he would meet with Kremlin head Vladimir Putin on August 15 in Alaska for talks on ending the war in Ukraine.
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The talks will begin after increased US pressure on Russia, raising the likelihood of tougher sanctions against Moscow if a peace agreement is not reached.
"If peace talks reach a dead end and the conflict drags on, the market could quickly turn bullish, potentially triggering a sharp rise in oil prices," said Sugandha Sachdeva of New Delhi-based research firm SS WealthStreet.
Trump set a deadline - last Friday - for Russia, which invaded Ukraine in February 2022, to agree to peace, otherwise buyers of its oil would face additional sanctions. At the same time, Washington is pressuring India to reduce its purchases of Russian oil.
Consulting firm Energy Aspect estimated that Indian refineries have already purchased 5 million barrels of WTI crude for August delivery, with the possibility of an additional 5 million barrels depending on tender results, and 5 million barrels for September delivery.
The WTI arbitrage in Asia remains open, and India is likely to continue buying US oil, Energy Aspect reported in its weekly review.
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Trump's tariff hike on imports from dozens of countries, which took effect on Thursday, is expected to negatively impact economic activity as it leads to changes in supply chains and contributes to rising inflation.
Amid a gloomy economic outlook, Brent crude prices fell 4.4% in the week ending Friday, and WTI crude prices fell 5.1%.
"Short-term dynamics will depend on several key events, including the meeting of the US and Russian presidents on August 15, upcoming speeches by Fed officials, and the release of US consumer price index data," according to Sachdeva.
In addition, data from the National Bureau of Statistics (NBS) released on Saturday showed that producer prices in China fell more than expected in July, while consumer prices remained flat, which, as stated, highlights the extent of the impact of weak domestic demand and persistent trade uncertainty on consumers.
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