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U.S. crude oil futures failed to hold on to the $80 level reached last week on Monday as two Fed officials said they had not concluded that inflation was trending back toward the central bank’s 2% target and were waiting for more signs that inflation was picking up. .decline before starting to cut interest rates.
The deaths of Iran’s president and foreign minister, whose helicopter crashed in bad weather on Sunday, had little impact on oil markets as Iran’s oil policy is likely to remain unaffected as Supreme Leader Ayatollah Ali Khamenei controls holds the ultimate power in the country.
According to Dow Jones, FxPro analyst Alex Kuptsikevich wrote: “Despite the death of the Iranian president, which should push risk premiums higher, and despite strong gains in metals and other commodities on China’s stimulus measures, oil prices are still falling.”
Warren Patterson, head of commodities strategy at ING, said the oil market “seems increasingly numb to geopolitical developments, possibly due to the large amount of spare capacity OPEC has.”
Front-month Nymex Crude Oil (CL1:COM) for June delivery is closed -0.3% to US$79.80/barrel, front month July Brent crude oil (CO1:COM) settlement -0.3% to $83.71/barrel, ending a three-session winning streak for both benchmarks.
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Reuters reported that Russian oil exports to China increased by 30% in April compared with the same period last year.
Russia has been China’s top supplier for 12 consecutive months, signaling a shift in export patterns after the Group of Seven imposed oil price caps and other sanctions.
In April, China imported a total of 2.25 million barrels/day of oil from Russia and 980,000 barrels/day of oil from Malaysia, which is a transit point for sanctioned oil from Iran and Venezuela.
