(Bloomberg) — Oil fluctuated alongside equities as traders assess the risks of supply disruptions in the Middle East ahead of a meeting between Israeli Prime Minister Benjamin Netanyahu and US President Donald Trump.
West Texas Intermediate flipped between gains and losses to trade above $64 a barrel as traders monitored tensions in the Middle East, centered on OPEC member Iran. The US and Israeli leaders are slated to meet on Wednesday, with investors expecting Netanyahu to urge a tougher US stance on Tehran’s ballistic missile program.
“I will present to the president our views regarding the principles of the negotiation,” Netanyahu said of the upcoming talks.
In the absence of clear signals on the direction of the Middle East conflict, oil prices took cues from broader markets.
Crude has risen more than 10% this year as recurrent geopolitical flare-ups eclipsed concerns that a global surplus would lift inventories and hurt prices. A new raft of data will give traders fresh insights into market conditions, starting with an update from the official US forecaster later Tuesday.
The US said that American-flagged vessels should stay as far as possible from Iranian waters when passing through the Strait of Hormuz. Washington has amassed a powerful military force in the Middle East, even as it also pursues talks with Tehran over its nuclear ambitions.
The Strait of Hormuz is a critical trade artery for Middle East energy shipments that links a slew of producers to global markets, especially in Asia. Tehran has threatened to close the maritime chokepoint during periods of geopolitical tension, though it hasn’t actually followed through.
“Both Washington and Tehran seem to have put a positive spin on the Oman talks, signaling that further discussions will likely be held,” RBC Capital Markets LLC analysts including Helima Croft said in a note.
During a recent visit to the Gulf, “well-placed regional observers suggested that the fear of higher oil prices could ultimately push” Trump to seek a settlement, the RBC analysts added.
In another support to prices, assessments by eastern NATO member states Poland and Estonia reveal that Russia has no intention of ending its war in Ukraine. The report warns that President Vladimir Putin is likely using peace talks to buy time and restore full relations with Washington, a path that would open the possibility of sanctions relief.
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–With assistance from John Deane and Salma El Wardany.
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