Oil prices fell in early Asian trading on Monday, extending declines of more than 4% last week on higher U.S. tariffs on its trading partners, an OPEC output hike, and expectations the U.S. and Russia were moving closer to a Ukraine ceasefire pact.
Brent crude futures fell 52 cents, or 0.78%, to $66.07 a barrel by 0041 GMT, while U.S. West Texas Intermediate crude futures fell 58 cents to $63.30.
Expectations have risen for a potential end to sanctions that have limited the supply of Russian oil to international markets, after U.S. President Donald Trump said on Friday that he would meet with Russian President Vladimir Putin on August 15 in Alaska to negotiate an end to the war in Ukraine.
The news came as the U.S. has stepped up pressure on Russia, raising the prospect that penalties on Moscow could also be tightened if a peace deal isn’t reached.
Trump set a deadline of last Friday for Russia to agree to peace in Ukraine or have its oil buyers face secondary sanctions, and at the same time is pressing India to reduce purchases of Russian oil.
On top of U.S.-Russia talks, U.S. inflation data on Tuesday will be another key price driver this week, IG market analyst Tony Sycamore said in a note.
“A weaker-than-expected CPI print would boost expectations for earlier and deeper Fed interest rate cuts, which would likely stimulate economic activity and increase crude oil demand.”
“Conversely a hotter print would spark stagflation fears and push back expectations of Fed rate cuts.”
Trump’s higher tariffs on imports from dozens of countries, which took effect on Thursday, are expected to weigh on economic activity as they force rerouting of supply chains and higher inflation.
Dragged down by the gloomy economic outlook, Brent fell 4.4% over the week ended Friday, while WTI dropped 5.1%.
(Reporting by Colleen Howe; Editing by Sonali Paul)