Oil prices edged down Monday morning, ahead of a highly anticipated meeting between President Donald Trump and his Russian counterpart, Vladimir Putin.
September Brent crude LCOU8, -1.90% the international benchmark, fell $1.33, or 1.8%, to $74.01 a barrel on the ICE Futures Europe exchange. Its closing low of last week, $73.40 on Wednesday, was the lowest settlement since June 21. That accounted for a 2.3% skid for Brent prices for all of last week.
August West Texas Intermediate crude CLQ8, -1.62% the U.S. benchmark, fell $1.20, or 1.7%, to $69.82 a barrel. The contract settled at $70.33 a barrel on the New York Mercantile Exchange Thursday—the lowest since June 25. Prices also briefly hit lows Thursday under $70 a barrel for the first time in over two weeks. All told, WTI lost 3.8% for last week.
Trump and Putin are set to meet in Helsinki and could potentially announce Russia’s willingness to further increase crude production to fill supply gaps in the global market, according to Thomas Pugh, commodities economist at Capital Economics.
There is a “fair chance” that Putin will commit to ramping up oil output by a higher level than Russia agreed to last month in coordination with the Organization of the Petroleum Exporting Countries, Pugh said.
OPEC and oil producing allies like Russia, which have been holding back output since the start of last year, agreed in late June to begin increasing production by up to one million barrels a day amid global supply disruptions.
At the same time prices shifted lower following reports the U.S. could move to release more barrels of oil from its strategic petroleum reserves. “The government is coming under increased pressure as a result of rising gasoline prices, with national average gasoline prices up almost 16% since the start of the year,” according to analysts at ING Bank.
Concerns over an escalating trade war between the U.S. and China have also weighed on prices, according to Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd.
Oil market observers are looking ahead to weekly U.S. petroleum inventory data from the American Petroleum Institute, an industry group, on Tuesday and from the Energy Information Administration on Wednesday.
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