On Monday, oil prices fell by nearly 3 per cent on signs of progress in talks between the United States and Iran, while investors remained concerned about economic headwinds from tariffs that could curb fuel demand.
Brent crude depreciated during the session by $1.93 or 2.8 per cent to $66.03 a barrel and the US West Texas Intermediate (WTI) crude fell by $1.69 or 2.6 per cent to $62.99 a barrel.
The market had closed last Thursday and could not trade on Good Friday because of a public holiday for Easter.
The US-Iran talks seem relatively positive, which allows for people to start thinking about the possibility of a solution.
Iranian Foreign Minister Abbas Araghchi also said in a post on X that the talks made “progress on principles and objectives of a possible deal” but warned that “optimism may be warranted but only with a great deal of caution.”
This came after further sanctions by the US last week against a Chinese independent oil refinery that it alleges processed Iranian crude, ramping up pressure on Iran.
Lingering concerns about a global trade war also weighed on oil prices as traders await signs of progress from President Donald Trump’s trade talks.
Potentially adding to the worries, China has threatened to retaliate against any countries that reach a trade deal with the US at the expense of China’s interests. This put more pressure on traders.
Markets also came under stress on Monday after US President Donald Trump repeated criticisms about the Federal Reserve.
Last week, the American President threatened to fire Mr Jerome Powell as the head of the US central bank over the country’s monetary policy.
The US economy could slow down unless interest rates are lowered immediately, President Donald Trump said on Monday.
Meanwhile, the Organisation of the Petroleum Exporting Countries and allies such as Russia, collectively known as OPEC+, is still expected to increase output by 411,000 barrels per day starting in May.
Some of that increase may be offset by cuts from countries that have been exceeding their quotas including Iraq and Kazakhstan.
Last week, seven oil-producing nations cut output by a further 369,000 barrels per day in monthly steps between now and June 2026, compared with an earlier plan running from March until next June.
Under the latest plan, monthly cuts will range from 196,000 barrels per day to 520,000 barrels per day from this month until June 2026, up from between 189,000 barrels per day and 435,000 barrels per day previously.
Should the latest cuts be made in full, the compensation plan would to a large extent offset a planned 411,000 barrels per day output increase being made by other members of OPEC+ in May, providing additional support for the oil market.