Oil prices fell early on Monday as concerns about a potential disruption to Iran’s oil supply in case of U.S. strikes subsided, while traders began to assess the next geopolitical flashpoint U.S. President Donald Trump has created—Greenland.
As of 9:53 a.m. ET on Monday, the U.S. benchmark, WTI Crude, had returned to below $60 per barrel, trading at $59.16, down by 0.27% on the day. The price of the U.S. oil has stayed for months very close to the breakeven prices for profitably drilling a new well at many U.S. independent shale producers.
Even oil tycoon and wildcatter Harold Hamm has said he would halt drilling operations in North Dakota for the first time in decades, due to the low oil prices that erase profit margins.
The international benchmark, Brent Crude, fell below the $64 per barrel handle early on Monday, trading down by 0.39% at $63.88 as of 9:53 a.m. ET.
Trade could be thinner in the U.S. on Monday on the federal holiday
Martin Luther King Jr. Day.
Oil prices eased from last week’s highs of over $66 per barrel Brent and nearly $62 per barrel WTI, after tensions over Iran and its handling of the protests started to ease and U.S. President Donald Trump appeared to back off from a strike on Iran, for now.
But President Trump stirred a commotion in another part of the world after saying the U.S. would slap tariffs on its European and NATO allies Denmark, Norway, Sweden, France, Germany, the United Kingdom, The Netherlands, and Finland, for supporting Greenland’s status as an autonomous Danish territory.
The return of the U.S.-EU tariff row, now over Trump’s obsession to take over Greenland, threatens to return the cross-Atlantic trade row as European leaders have suggested the EU could pull out of the trade deal with the United States.
Following renewed threats from the U.S. against Greenland, gold and silver prices jumped on Monday, while European equities fell.
“The re-emergence of tariff friction is likely to weigh on risk assets today,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a Monday note.
“Despite the pressure on flat price, the prompt ICE Brent timespread remains firm, suggesting some tightness in the spot physical market,” they added.
By Charles Kennedy for Oilprice.com
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