MARKET NEWS
Oil jumps as Trump shortens Russia's deadline to end Ukraine war, US-EU trade deal spurs demand optimism - YAHOO FINANCE
BY Ines Ferré Senior Business Reporter
Oil prices jumped Monday as President Trump shortened a timeline for Russia to end the war with Ukraine, prompting concerns potential sanctions could hit supply. Meanwhile, an agreement between the US and EU on the framework of a trade deal spurred optimism over demand.
West Texas Intermediate (CL=F) climbed 1.9% to trade above $66 per barrel, and Brent (BZ=F) crude, the international benchmark price, rose to nearly $69 per barrel.
The trade deal between the European Union and the US announced on Sunday includes $750 billion in EU purchases of American oil and natural gas.
The stocks of liquified natural gas producers like Cheniere Energy (LNG), NextDecade (NEXT), and Venture Global (VG) all rose Monday as well.
The 15% tariff deal on US imports from the EU fueled investors optimism over an eventual agreement with China as Washington and Beijing launched renewed trade talks.
Meanwhile on Monday, President Trump shortened a timeline on Russia to end the war with Ukraine, from 50 days to less than two weeks, spurring concerns of a supply shock ahead.
The president has threatened “secondary tariffs” on Russia and countries purchasing from Moscow.
"If enforced, oil markets cannot ignore the impact of triple-digit tariffs on Russian oil, given the significant scale of Russian exports and limited OPEC spare capacity, potentially leading to a supply shock," JPMorgan's Natasha Kaneva and her team wrote in a note earlier this month.
The EU recently approved tougher price caps on Russian crude exports expected to go into effect in early September as a way to curtail the country’s revenue.
JPMorgan analysts expect oil price volatility to increase heading into September, citing uncertainty around Russia.
The analysts also noted increases in supply from the Organization of Petroleum Exporting Countries and its allies (OPEC+) will already have been absorbed into the market by the fall.
