retreated in early Monday trading as traders await a closely watched meeting between U.S. President Donald Trump and Russian President Vladimir Putin in Alaska later this week. slipped 0.7% to $66.13 a barrel, while WTI fell 0.8% to $63.36. The drop extends a recent downtrend, with Brent now at its lowest level since early June.
Missed Sanctions Deadline Eases Supply Risks
Trump’s self-imposed deadline for Moscow to strike a peace deal with Ukraine passed without the imposition of new U.S. sanctions, a move that ING analysts say has temporarily calmed fears of immediate supply disruptions from Russia—one of the world’s largest crude exporters. While that eased supply-side tension, it also removed a key bullish driver for oil prices in the near term.
Market Positioning Signals Weak Confidence
CFTC data shows hedge funds and other speculators have cut their net long positions in Brent, signaling a shift in sentiment. ING notes that despite ongoing geopolitical flashpoints, traders are increasingly unwilling to bet on sustained price gains without stronger demand fundamentals.
Demand Outlook Under Pressure
The bigger story for oil markets is on the demand side. Trump’s sweeping tariffs on dozens of U.S. trade partners are expected to dampen global trade flows and economic activity, weighing on fuel consumption. The IMF has already warned that escalating trade tensions could shave up to 0.5% from global GDP growth, which would translate into lower oil demand growth in 2024–2025.
Recent manufacturing data from Europe and Asia has also shown a slowdown, adding to concerns that the global economy is losing momentum. “The market’s focus has clearly shifted from supply risks to demand risks,” ING said in a note.
What to Watch Next
This week’s Trump–Putin meeting will be closely scrutinized for any signs of sanctions policy changes, which could either tighten supply or further depress prices if no action is taken. Traders will also watch for fresh Chinese economic data and U.S. inventory reports, which could either confirm or challenge the bearish demand narrative.