FX.co ★ Oil Falls Amid Easing Mideast Tensions

WTI crude oil futures experienced a decline of over 1%, settling at approximately $64.5 per barrel on Monday. This drop comes after the commodity registered its steepest weekly decrease in more than two years, driven by reduced tensions in the Middle East. Last week, crude prices fell by more than 11%, marking their worst weekly performance since March 2023. This downturn is attributed to the sustained Israel-Iran truce, which has lessened fears of a wider conflict potentially disrupting oil supplies from the region. However, Iran has expressed skepticism about the longevity of the US-mediated ceasefire with Israel, cautioning of possible retaliation should hostilities resume. Concurrently, President Donald Trump indicated a willingness to entertain the idea of easing sanctions on Iran, provided the country maintains peace. Adding to the downward pressure on prices, reports emerged that OPEC+ is preparing to increase production by 411,000 barrels per day come August, following a similar planned increment for July. In addition, market participants remain watchful of trade developments as the July 9 deadline set by the Trump administration for finalizing trade deals approaches.