Recap: The crude market on Monday sold off sharply as geopolitical tensions between the U.S. and Iran appeared to ease. Over the weekend, U.S. President Donald Trump said Iran was “seriously talking” with Washington, signaling a de-escalation of tensions, while a stronger dollar and milder weather forecasts also pressured the oil complex. The market opened at its high of $64.74 and sold off sharply amid the news that arrangement for negotiations between Iran and the U.S. were underway. U.S. and Iranian officials are expected to meet on Friday to discuss a possible nuclear deal. The oil market extended its losses to over $3.80 as it posted a low of $61.39 in overnight trading. The market later settled in a sideways trading range during the remainder of the session. The March WTI contract settled down $3.07 at $62.14 and the April Brent contract settled down $3.02 at $66.30. The product markets ended the session sharply lower, with the heating oil market settling down 17.32 cents at $2.3598 amid a change in the 8-15 day weather forecast calling for near normal to above normal temperatures for most of the country. The RB market settled down 9.08 cents at $1.8514.
Technical Analysis: The oil market will likely retrace some of its sharp losses and trade in a mostly sideways trading range as the market awaits further developments regarding a meeting later this week between the U.S. and Iran to discuss the Middle Eastern country’s nuclear program. The market will also remain in a sideways trading range ahead of a trilateral meeting between the U.S., Russia and Ukraine, over Russia’s war in Ukraine scheduled for Wednesday and Thursday. The crude market is seen finding support at $61.39, $60.66, $60.14, $59.52, $59.29, $58.96, $58.53 and $58.32. Meanwhile, resistance is seen at $63.33, $63.94, $64.54, $64.74, $66.11 and $66.48. More distant resistance is seen at $66.75, $67.74, $69.58, $70.41 and $70.51.
Fundamental News: Axios reported that U.S. President Donald Trump’s special envoy Steve Witkoff and Iranian Foreign Minister Abbas Araqchi are expected to meet on Friday in Istanbul to discuss a possible nuclear deal. Earlier, Iran’s semi-official Fars news service reported that President Masoud Pezeshkian ordered the start of negotiations with Washington “within the framework of the nuclear issue.”
Ukrainian President, Volodymyr Zelenskiy, said a new round of U.S.-brokered trilateral talks between Ukraine and Russia will take place in Abu Dhabi on February 4th and 5th, adding that Kyiv was ready for a “substantive discussion”. On Monday, U.S. President Donald Trump’s senior envoy Steve Witkoff will arrive in Israel on Tuesday, where he will meet Israeli Prime Minister Benjamin Netanyahu amid heightened regional tensions with Iran and as the Trump administration presses ahead with its plan to end the Gaza war.
The Kremlin also said that the next round of U.S.-brokered trilateral talks between Ukraine and Russia will take place in Abu Dhabi from February 4th-5th, saying talks planned for February 1st had not happened for scheduling reasons.
OPEC+ agreed to keep its oil output unchanged for March at a meeting, even after crude prices hit six-month highs on concern the U.S. could launch a military strike on Iran. Sunday’s brief meeting reaffirmed their decision to keep output unchanged for March, after earlier gatherings did the same for January and February.
Crude oil producers in the United States continued bringing oil wells back online on Monday, with only around 0.7% of national output still halted in the aftermath of a winter storm that cut output in late January. According to consultancy Energy Aspects, about 100,000 bpd of crude output remained shut, with outages in the Anadarko accounting for the majority of the losses, followed by the Appalachia.
Early Market Call – as of 8:50 AM EDT
WTI – Mar $62.58, up 25 cents
RBOB – Mar $1.8713, up 1.81 cents
HO – Mar $2.3951, up 2.78 cents
