Oil turned lower after earlier touching the highest price since April as investors weighed the threat of further interest rate hikes against the risk to commodity ships in the Black Sea.
(Bloomberg) — Oil turned lower after earlier touching the highest price since April as investors weighed the threat of further interest rate hikes against the risk to commodity ships in the Black Sea.
West Texas Intermediate traded below $82 a barrel at the start of the week after rising more than 4% over the previous two sessions. In recent days, sea drones hit a Russian oil tanker and naval vessel, highlighting the threat to fuel flows on a key route to global markets. Still, exports are continuing from the region at a time when the market is relatively well supplied.
“Prices tend to only react when there is a disruption,” said Giovanni Staunovo, a commodity analyst at UBS Group AG. “At the moment, the oil is still flowing.”
With the elevated risks in the Black Sea doing little to propel prices, there were instead headwinds from wider markets on Monday. A selloff in government bonds accelerated, spurred by the threat of further rate hikes.
Meanwhile in central Europe, Poland has stopped shipping oil through a section of the Druzhba link running to Germany after detecting a leak late Saturday, according to pipeline operator PERN. The firm plans to resume pumping Tuesday morning.
Oil capped a sixth weekly gain last week, the longest rising streak since June 2022. Futures have erased year-to-date losses as supply cuts from Saudi Arabia and Russia tighten the market. On Saturday, the kingdom raised almost all of its prices for September to Asia and Europe.
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