Rising Tension Between US and Iran, Oil Slips.
Rising tension between the US and Iran spurred concern there could be disruptions to global energy flows or even outright war.
Futures in New York fell after closing up 0.8% on Monday.
Oil splipped as investors weighed mixed signals from the White House on Iran and signs that an extension of the Opec production cuts may not be a fait accompli.
President Donald Trump imposed sanctions on Ayatollah Ali Khamenei, Irans’ supreme leader, while also asking in a tweet why the U.S. is protecting the strait of Hormuz.
Russia could take the wait-and-see approach on the OPEC output deal before the G20 summit in Japan.
“Investors are taking a wait-and-see stance, as it’s not certain how things will go at the G-20 summit,” said Jun Inoue, a senior economist at Mizuho Research Institute Ltd. in Tokyo. “Concern over the economic slowdown means WTI oil prices aren’t likely to rise to $65, or even $60, unless there’s a rapid escalation of tensions in the Middle East or major progress in the trade talks.”
Russia’s Energy Minister Alexander Novak said “we need to wait until the G-20 leaders’ meeting” in Japan this week and see “how the economic situation will develop.” Kazakhstan and Azerbaijan said that recent market data show there is a need to prolong the OPEC+ supply agreement. Saudi Arabia indicated earlier this month that it was sure the coalition will extend production cuts.
Souce: Bloomberg L.P.
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