Crude briefly flipped to positive earlier in the session after CNN said fresh penalties on Moscow may be announced in the coming days, potentially bolstering the risks to crude supplies in one of the world’s largest producers. US President Donald Trump said he’s considering new sanctions against Russia after large drone attacks on Ukraine in recent days.
The truce between the world’s two largest economies brought some temporary relief to commodity markets roiled by tariffs that dented the outlook for global economic growth in recent weeks. Oil watchers have slashed demand forecasts, and the trade war already was showing signs of reducing the volume of goods arriving in the US.
Last week, eight OPEC+ countries announced they would phase-out voluntary oil output cuts by ramping up output by 411,000 barrels per day in May–equivalent to three monthly increments. In other words, the Saudis are signaling they might be willing to give up their long-time role as OPEC’s swing producer in an attempt to take a tougher stance against countries that continue to violate the output pact, most notably Kazakhstan, the UAE and Iraq.