Oil prices fell Monday, with risk sentiment hit after U.S. President Donald Trump threatened economic sanction on a number of European countries, a move which increases the prospect of a broader transatlantic trade dispute.
At 05:25 ET (10:25 GMT), Brent Oil Futures expiring in March fell 0.9% to $63.54 per barrel, and West Texas Intermediate (WTI) crude futures dropped 0.8% to $58.88 a barrel.
Get premium crude market insights, research analysis with InvestingPro Trump threatens EU tariffs over Greenland Risk sentiment has taken a hit after Trump said he would impose tariffs on eight European nations that have opposed his plan for the United States to acquire Greenland.
The countries targeted include France, Germany, and the United Kingdom, along with several Nordic and northern European states.
Trump said a 10% tariff would take effect on Feb. 1, rising to 25% in June if no agreement is reached.
Media reports suggested that the European Union is preparing to halt a proposed EU-U.S. trade deal in response and may revive a E93 billion package of tariffs on U.S. goods, raising the prospect of a broader transatlantic trade dispute.
"There’s also a push from France for the EU to use its anti-coercion instrument against the U.S.. This would restrict U.S. access to the EU single market," said analysts at ING, in a note. "There will likely be plenty of noise this week around these developments, particularly as both world and business leaders gather for the World Economic Forum in Davos."
Iran supply risks ease Crude prices had rallied at the start of last week on worries that unrest in Iran could disrupt oil supplies from the Middle East, a region that accounts for a significant share of global output.
However, much of that premium faded after Trump said there would be no immediate U.S. military intervention, prompting a pullback in prices before they stabilized toward the end of the week.
Net long Brent positions increase The latest positioning data showed that speculators increased their net long positions in ICE Brent by 85,496 lots over the last reporting week to 208,461 lots as of last Tuesday.
"This is the largest position held since September. This move was predominantly driven by fresh buying amid growing supply concerns from Iran, given the recent protests in the country and the potential for U.S. intervention. Although these concerns have subsided in recent days," said ING.
