Oil News: Crude Flat as Ukraine Peace Talks and Rising Iraqi Supply Weigh on Prices

Crude Oil Holds Steady as Traders Eye Ukraine Peace Talks and OPEC+ Moves

Light crude oil futures are trading flat on Monday, with prices hovering around $70.45 after briefly dipping below a critical Fibonacci 61.8% support level at $70.35.

Earlier in the day, the market slid to $69.80, breaching last week’s low of $70.12, before showing a modest recovery. Technical indicators signal potential downside risks, with crude oil prices remaining below both the 50-day moving average at $71.97 and the 200-day moving average at $70.64.

At 11:41 GMT, Light Crude Oil Futures are trading $70.43, up $0.03 or 0.00%.

Oil Market Awaits Clarity on Ukraine Peace Negotiations

Oil traders are closely monitoring developments in Ukraine as peace talks progress. An extraordinary summit of European Union leaders on March 6 will focus on additional support for Ukraine and potential European security guarantees. Meanwhile, U.S. President Donald Trump’s direct talks with Russia—without Ukraine or the EU present—add uncertainty to the geopolitical landscape.

While sanctions on Russian oil exports have disrupted global supply chains, a potential end to the war might not significantly boost Russian oil exports due to OPEC+ production curbs. However, geopolitical risk premiums could diminish, potentially applying downward pressure on crude prices, according to Harry Tchilinguiran, head of research at Onyx Capital Group.

Iraqi Oil Supply Could Add Further Pressure to Prices

A potential increase in oil supply from Iraq is another bearish signal for the oil market. Iraq is preparing to export 185,000 barrels per day from Kurdistan’s oilfields through the Iraq-Turkey pipeline once operations resume. Though the exact timeline for resuming flows remains unclear, the additional supply could weigh on crude prices.

Analysts also highlight the broader supply outlook, with increased output expected from non-OPEC+ countries like the United States, Canada, Brazil, and Guyana. The U.S. Energy Information Administration (EIA) projects U.S. oil production to hit a record 13.6 million barrels per day in 2025, contributing to a forecasted global supply growth of 1.6 million barrels per day.

OPEC+ Faces Tough Choices as Market Control Wanes

OPEC+ is walking a tightrope as it considers whether to ease production caps in April 2025. The group, which includes Russia, is currently holding back 5.85 million barrels per day—about 5.7% of global demand—to support prices. However, with supply growth expected to outpace demand by 500,000 barrels per day in 2025, OPEC+ risks losing market share to non-member producers.

Internal pressures within OPEC+ are also mounting. Kazakhstan, Nigeria, and the United Arab Emirates are increasing production capacity, testing the alliance’s discipline in maintaining output restrictions. The group’s credibility and influence could suffer if it fails to manage this supply surge effectively.

Market Forecast: Bearish Bias Likely to Persist

The crude oil market is showing signs of bearishness as traders weigh geopolitical developments and rising supply prospects. Technical indicators suggest vulnerability, with the market unable to reclaim key moving averages. An end to the Ukraine war or a supply increase from Iraq could accelerate the downward momentum.

The path of least resistance appears to be lower, with a potential test of the December 24 main bottom at $67.06. Unless geopolitical headlines offer significant support, crude oil may struggle to find bullish catalysts in the near term.

More Information in our Economic Calendar.