DTN Oil Update
WTI at $58 as Supply Focus Outweighs Russia Sanctions
SECAUCUS, N.J. (DTN) -- Oil futures contracts dropped 2% Monday as concerns about abundant global supply overshadowed sanctions on Russian oil.
Russia's efforts to evade restrictions on its energy exports, including outreach to buyers such as India, signaled its crude will keep flowing into an oversupplied market despite U.S. and other Western attempts to penalize the Kremlin over the war in Ukraine.
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"The absence of a peace deal between Russia and Ukraine has stalled crude's reaction near the ($)60 barrel (bbl) price zone," Razan Hilal, market analyst at StoneX in London, said in a note Monday. "While sanction risks support crude's bullish-to-neutral hold, inventories increase ... reinforcing oversupply concerns despite OPEC's expected Q1 2026 production hold."
Expectations of a mounting crude glut intensified after Russian President Vladimir Putin's visit to New Delhi last week, where he pledged uninterrupted fuel supplies to India. The trip came as traders were weighing how sanctions on Russian oil might affect a market OPEC says was already oversupplied by nearly 500,000 barrels per day (bpd) in the third quarter.
Russia has also dismissed any U.S.-backed Ukraine peace deal proposal that fails to meet its own conditions.
Over the weekend, U.S. President Donald Trump voiced frustration as well with Ukrainian President Volodymyr Zelenskiy's approach to the White House-driven peace effort
The NYMEX WTI futures contract for January delivery settled down $1.20, or 2%, at $58.88 bbl. ICE Brent for February shipments tumbled $1.24, or 2%, to $62.51 bbl.
The NYMEX front-month ULSD futures slumped $0.0671, or 2.8%, to $2.2958 gallon. Front-month RBOB futures contract fell $0.0371, or 2%, to $1.7970 gallon.
The U.S. Dollar Index dropped by 0.033 to 98.935 against a basket of foreign currencies.