Brent crude dipped 16 cents, or 0.2%, to settle at $65.38 a barrel, while U.S. West Texas Intermediate (WTI) lost 13 cents, or 0.2%, to close at $62.56.
Tehran hardened its stance, with Iran’s Supreme Leader Ayatollah Ali Khamenei rejecting U.S. demands to end uranium enrichment, casting further doubt on the likelihood of a nuclear deal. Analysts, including StoneX’s Alex Hodes, warned that the potential for 300,000–400,000 barrels/day of Iranian oil reentering the market is now in question.
The European Union and Britain imposed new sanctions on Russia, following a call between U.S. President Trump and Russian President Putin that failed to yield a ceasefire. Ukraine, meanwhile, urged G7 nations to cut the Russian oil price cap from $60 to $30 per barrel. Despite speculation that a peace agreement could eventually boost Russian oil supply, SEB’s Bjarne Schieldrop noted the outcome remains distant and uncertain given Russia’s commitments under OPEC+.
Economic data from China continued to weigh on sentiment. Slowing industrial output and retail sales reinforced fears of weakening fuel demand from the world’s largest oil importer. However, Goldman Sachs highlighted a late uptick in Chinese trade flows, citing positive momentum tied to the 90-day U.S.-China tariff pause.
In the U.S., traders are watching the Federal Reserve, with at least seven officials scheduled to speak this week. Expectations remain for two rate cuts in 2025, beginning as early as September. Lower interest rates can spur growth and oil demand by easing borrowing costs.
U.S. oil inventories are also in focus. Analysts forecast a 1.2 million-barrel draw in crude stockpiles for the week ending May 16, according to API and EIA reports due Tuesday and Wednesday. If confirmed, this would mark the third draw in four weeks, though still below the five-year seasonal average.