Oil Edges Off Recent Highs
By Christopher Alessi
LONDON -- Oil prices edged down slightly Tuesday as investors weighed geopolitical risks to supply but mainly held on to last week's robust gains.
Brent crude, the global benchmark, was down 0.1% at $71.34 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.1% at $66.16 a barrel.
Crude prices climbed to more than three-year highs at the end of last week in advance of U.S.-led strikes on the Syrian regime. But prices retreated Monday after tensions in Syria appeared to subside in the wake of the airstrikes, as Russia -- a key Syrian ally -- didn't retaliate.
The oil market is in a "wait-and-see mode," said Giovanni Staunovo, commodity analyst at UBS Wealth Management.
On the geopolitical front, Mr. Staunovo said oil-market participants weren't only eyeing the situation in Syria, but also whether the Trump administration moves to reimpose economic sanctions on Iran next month. Such a move could frustrate the oil output of one of the Organization of the Petroleum Exporting Countries' largest crude producers and reduce global supply.
"The political noise is as loud as it gets. Middle East tensions support the bullish market mood and push oil to new highs," Norbert Ruecker, head of macro and commodity research at Julius Baer, wrote in a note Tuesday.
Meanwhile, analysts and investors are looking ahead to the next joint ministerial monitoring meeting of the OPEC and non-OPEC countries that have joined forces to hold back crude-oil production. The ministers are set to discuss options for further cuts into next year when they meet in Jeddah on Friday.
OPEC and 10 producers outside the cartel, including Russia, have been holding back crude output by 1.8 million barrels a day since the start of last year. The agreement, meant to rein in a global supply glut that has weighed on prices for over three years, is set to expire at the end of 2018.
Market participants will also be looking to weekly data out Tuesday from the American Petroleum Institute, an industry group, on U.S. crude inventory levels.
Among refined products, Nymex reformulated gasoline blendstock -- the benchmark gasoline contract -- was down 1.2%, at $2.04 a gallon. ICE gasoil, a benchmark for diesel fuel, changed hands at $630.25 a metric ton, down 0.5% from the previous settlement.
Write to Christopher Alessi at [email protected]