FX.co ★ Oil Drifts Lower on Demand Concerns

West Texas Intermediate (WTI) crude oil futures dropped to approximately $61.3 per barrel on Monday, primarily due to ongoing concerns about weakening global demand, exacerbated by the prolonged U.S.–China trade conflict. Despite President Donald Trump's decision to exempt certain electronic products, primarily sourced from China, from extensive tariffs, he hinted at the introduction of a new series of tariffs, keeping market uncertainty high. Additionally, the decision by OPEC+ to boost output more swiftly than anticipated has raised fears of an impending supply surplus. Market participants are now focused on the producer group's monthly market outlook, expected later today, to gain insights into the market's underlying conditions. On the geopolitical stage, a reduction in tensions between the U.S. and Iran could potentially lead to an increase in global supply, notably benefiting China, a key importer. Recent discussions in Oman, representing the first high-level engagement between the U.S. and Iran since 2022, suggest renewed diplomatic efforts to address the enduring deadlock over Iran's nuclear agenda.