Oil declined as US President Donald Trump's attempts to annex Greenland sent jitters through wider markets.
West Texas Intermediate fell below $60 a barrel after moving higher at the start of the week, while Brent crude closed near $65. The American push to seize the Arctic territory has thrown the US-EU alliance into doubt, eroding the appetite for risk assets, including commodities like oil and copper.
Crude remains under pressure from expectations that supply will outpace demand this year, with the International Energy Agency — due to release its monthly outlook later on Wednesday — predicting a major glut. Venezuelan exports were also in focus, with traders tracking where the oil, which previously was mostly shipped to China, could be redirected after the US intervention.
For “at least three-four years, we may well see downward pressure on oil and gas prices because of the huge amount of supply coming from the US and some other countries,” IEA Executive Director Fatih Birol said during a panel discussion at the World Economic Forum in Davos, Switzerland, on Tuesday.
Still, pockets of tightness remain, with crude's prompt spreads — at present the gap between the March and April contracts — holding in backwardation, a bullish pattern. Halted output at a major Kazakh field, as well as constrained loadings at the Black Sea's Caspian Pipeline Consortium facility, are boosting physical-market strength.
Prices
- WTI for March delivery fell 1.3% to $59.58 a barrel at 8:21 a.m. in Singapore.
- Brent for March settlement closed 1.5% higher at $64.92 a barrel on Tuesday.
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