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Oil futures straddled the flat line Monday, consolidating after a cooling of Middle East tensions helped trigger the U.S. benchmark’s biggest weekly drop in more than five months.
West Texas Intermediate crude for February delivery CLG20, +0.14% rose 4 cents, or 0.1%, to $59.08 a barrel, while March Brent crude BRNH20, +0.15% was up 2 cents, or less than 0.1%, at $65 a barrel on ICE Europe. WTI, the U.S. benchmark, fell 6.4% last week, its biggest percentage loss since July, while Brent, the global benchmark, slumped 5.3%, for its biggest drop since August.
Analysts said oil steadied in part due to antigovernment demonstrations in Iran over the weekend that followed the Iranian government’s admission that it unintentionally shot down a Ukrainian airliner last week, killing all 176 people aboard, after initially denying responsibility.
President Donald Trump, in a tweet, addressed Iran’s leaders, saying “DO NOT KILL YOUR PROTESTERS.”
“If the regime opts to quash the protests as it did two months ago, this could quickly put an end to the phase of detente between the U.S. and Iran,” said Carsten Fritsch, analyst at Commerzbank. “The risk of the conflict flaring up again should not be ignored, so a certain risk premium on the oil price is still appropriate.”
Traders, however, appear focused on other issues, he said, including the expected signing of the U.S.-China “phase one” trade deal on Wednesday.
“It is hoped that this will give oil demand a boost. We do not believe this will happen. At best, it is likely merely to prevent any further slowdown in growth,” Fritsch said.
In other energy trading, February gasoline RBG20, +0.29% rose 0.2% to $1.6632 a gallon, while February heating oil HOG20, +0.24% was up 0.3% to $1.935 a gallon.
February natural-gas futures NGG20, +0.23% gained 0.4% to trade at $2.21 per million British thermal units.
