A Little Lower To Start The Week; Geopolitical Developments Eyed

WTI and Brent deal a little above early lows to trade ~-$1.10 apiece, operating comfortably within Friday’s range at typing. Both benchmarks are currently on track for their first monthly loss in seven months, with debate re: recessionary risks (and the corresponding decline in energy demand) evident.

• G7 leaders are discussing a potential price cap on oil bought from Russia this week. The move will be aimed at reducing the country’s energy profits while maintaining the supply of Russian crude to various buyers, easing worry from some quarters re: additional tightness in global crude supplies.
• The EU and Iran have announced the restart of U.S.-Iran nuclear talks, coming after the EU’s top diplomat Borrell visited Iran over the weekend. Talks will be aimed at “resolving the last outstanding issues”, with some G7 nations due to discuss the issue in detail on Tuesday.
• Elsewhere, Nigeria has pointed out that OPEC+ is running out of spare capacity to pump oil, with the country’s petroleum minister stating that “even Saudi Arabia” is “out of the market now” (re: possessing additional capacity).
• Looking ahead, OPEC+ meets on June 30 likely to decide on August output quotas, although lingering doubts re: the group’s ability to hit collective output targets (most recently underproduced by ~2.7mn bpd in May) will likely limit hopes for an increased output outlook surrounding the meeting.