By Georgina McCartney
HOUSTON (Reuters) -Oil settled flat on Monday after falling more than 4% last week, as investors looked towards talks this week between the U.S. and Russia over the war in Ukraine.
Brent crude futures settled up 4 cents, or 0.06%, at $66.63 a barrel. U.S. West Texas Intermediate crude futures settled up 8 cents, or 0.13%, at $63.96.
U.S. President Donald Trump said on Friday he would meet Russian President Vladimir Putin on August 15 in Alaska to negotiate an end to the war in Ukraine.
The talks follow increased U.S. pressure on Russia, raising the prospect of tighter penalties on Moscow if a peace deal is not reached.
Trump said on Monday both Ukraine and Russia would have to cede land to each other to end the war and that his talks with Putin would be aimed at taking the temperature on a possible deal.
“The recent sell-off in crude has paused as markets await Friday’s high-stakes meeting,” StoneX analyst Alex Hodes said in a note on Monday.
Trump set a deadline of last Friday for Russia, which invaded Ukraine in February 2022, to agree to peace or have its oil buyers face secondary sanctions. At the same time, Washington is pressing India to reduce purchases of Russian oil.
Oil prices have fallen in recent days as market participants lowered supply disruption estimates, probably because the U.S. imposed an extra tariff only on India rather than all buyers of Russian oil, said UBS analyst Giovanni Staunovo.
UBS has lowered its year-end Brent crude forecast to $62 a barrel from $68, citing higher supply from South America and resilient output from sanctioned countries.
Indian demand had fallen short of expectations of late, the bank said, adding it expected OPEC+ to pause its production increases unless larger unexpected supply disruptions emerge.
OPEC’s oil output rose further in July after an OPEC+ agreement to raise production, a Reuters survey found on Friday, although the hike was limited by Iraq making additional cuts and by drone attacks on Kurdish oilfields.
“The balance right now is between OPEC not raising production as much as anticipated versus the possibility that there will be a Ukraine ceasefire deal, and Russian oil might start to flow freely. That balance has oil bouncing around like a yo-yo right now,” said Phil Flynn, a senior analyst with Price Futures Group.
Elsewhere, an Exxon Mobil-led consortium began crude production four months earlier than expected at a fourth floating production, storage and offloading vessel in Guyana, Exxon said on Friday.
Separately, data from the National Bureau of Statistics on Saturday showed China’s producer prices fell more than expected in July.
(Reporting by Georgina McCartney in Houston, Enes Tunagurin London, additional reporting by Mohi Narayan in New Delhi, Colleen Howe in Beijing and Ahmad Ghaddar in LondonEditing by David Goodman, Bernadette Baum and Nia Williams)
