Oil prices were stable as traders awaited the fallout from US efforts to control Greenland, along with concerns about a global supply glut.
Brent crude futures for March settlement rose 0.2% to $64.07 a barrel at 2:14 p.m. Singapore time, while West Texas Intermediate crude futures for February delivery, which expire on Tuesday, are trading at $59.58 a barrel, up 0.2% from Friday's close.
US President Donald Trump’s efforts to annex Greenland have shaken markets, weakened the dollar, and raised fears of a damaging trade war between the United States and the European Union.
Mukesh Sahdev, chief executive of consultancy XAnalysts Pty Ltd, said the market is not pricing in a full-blown retaliatory strike between the US and the EU, and a settlement is likely.
But he added that if the dispute escalates, the United States may have the upper hand due to its economic superiority and advantage in energy supplies.
Concerns about oversupply are putting downward pressure on prices.
Crude oil prices remain under pressure from signs of oversupply, with some Middle Eastern grades seeing price declines as OPEC+ producers ramp up output. The International Energy Agency, which releases its next market analysis on Wednesday, has repeatedly warned of a significant glut this year.
Warren Patterson, head of commodity strategy at ING Group, said that the weakness of the US dollar and the stability of spot spreads provided some relative support for oil despite a broader wave of risk aversion, referring to the spot spreads between the months of crude delivery.
Patterson added that expectations of a large surplus suggest prices should trend downwards, while the possibility of further escalation in tensions between the United States and the European Union poses an additional risk to prices.
However, aside from general concerns about oversupply, pockets of scarcity remain in some parts of the market, as problems at the Caspian Pipeline Union terminal on the Black Sea, and now at Kazakhstan’s giant Tengiz field, contribute to short-term shortages in crude supplies from the Mediterranean region.
