Oil steadied after a string of declines as the prospect of increased flows from Iraq and Russia weighed on the outlook, with market gauges flashing signs of weakness on the likelihood of oversupply.
Brent traded below $75 a barrel, while West Texas Intermediate was near $71. WTI’s front-month contract traded at 1 cent less a barrel than the contract for the following month, the first time since November the so-called prompt spread has turned negative in a bearish structure known as contango.
The flip from the bullish backwardation pattern comes after two of the world’s main oil forecasting agencies last week said that there will be a mild glut this year. Supply concerns worsened over the weekend, with the president of Iraq’s semi-autonomous Kurdistan region flagging the likely resumption of oil exports next month and President Donald Trump’s push for an end to the war in Ukraine raising the prospect of an increase in flows from Russia.
“Sentiment in the oil market continues to sour with weakness in the flat price, while timespreads are also pointing towards a weaker physical market,” said Warren Patterson, head of commodities strategy for ING Groep NV.
Crude has been whipsawed by Trump’s rapid-fire tariffs — some of which were promptly walked back — and threats of sanctions on producers including Iran. Prices spiked on Friday after US Treasury Secretary Scott Bessent said the administration aims to squeeze Tehran’s oil exports to less than 10% of current levels, before dropping amid doubts over the plan’s feasibility.
