Russia & Ukraine Negotiations: Russia and Ukraine held brief peace talks in Istanbul on Monday, during which Moscow demanded Ukraine cede additional territory, limit its military, and abandon NATO ambitions, terms Kyiv views as surrender. Both sides agreed on humanitarian actions such as prisoner exchanges and the return of soldier remains, but made no progress on a ceasefire. Turkish President Erdogan expressed hopes for a summit involving Putin, Zelenskyy, and Trump, though no such plans were confirmed. Meanwhile, Ukraine launched a drone attack on Russia’s strategic bomber fleet, demonstrating its continued military capability and commitment to resisting Russian demands.
Nuclear Tensions Lift Oil Risk Premium: Iran is expected to reject a U.S. nuclear proposal, calling it one-sided and lacking clarity on sanctions relief or uranium enrichment rights. The proposal, delivered via Omani mediation, has failed to ease long-standing tensions, with Tehran labeling it a "non-starter." Iran demands immediate sanctions relief, while the U.S. insists on phased lifting tied to nuclear compliance. The stalled negotiations raise geopolitical risks in the Middle East, potentially supporting a higher risk premium in global oil markets.
Canadian Wildfires: Wildfires in Alberta have shut in over 344,000 barrels per day of oil sands production, impacting roughly 7% of Canada’s total crude output. Major producers including Cenovus, Canadian Natural Resources, and MEG Energy have evacuated workers and temporarily curtailed operations near Fort McMurray. While some damage appears minimal, power outages and precautionary shutdowns are delaying restarts. With 49 active fires in Alberta and growing evacuations, the situation remains fluid, adding near-term supply risks to North American crude markets.
Market Overview: Oil markets steadied Tuesday morning after a strong start to the week, with prices supported by escalating geopolitical tensions and signs of tighter supply. Iran is expected to reject a U.S. nuclear deal proposal, potentially keeping sanctions and its oil off the global market. OPEC+ maintained its planned July output increase of 411,000 bpd, easing fears of a larger production boost. Meanwhile, a weaker U.S. dollar and wildfire disruptions in Canada added upward pressure, while traders await U.S. inventory data expected to show a drawdown.
WTI Daily Chart
WTI crude futures are trading at $62.98, showing a modest gain to start the week, supported by wildfire-related supply disruptions in Alberta that have shut in over 344,000 bpd of production, around 7% of Canada’s total output. On the technical front, WTI is trading just above the 10-day moving average ($61.68) and the 30-day moving average ($61.27), suggesting a short-term bullish tilt if it can maintain this momentum. The Relative Strength Index (RSI) stands at 54.44, indicating neutral conditions with slight bullish momentum building but still far from overbought territory. Last week’s tight consolidation appears to be breaking to the upside, but follow through is needed to confirm a trend reversal. Traders are also eyeing this week’s OPEC+ meeting and Friday’s U.S. jobs report as potential market movers. Any sustained rally will need to clear resistance near $64, while support remains at the 30-day average near $61.
Oil prices climbed roughly 1.4% on Tuesday, with WTI settling at $63.41, as mounting geopolitical risks in Russia and Iran raised the likelihood of prolonged supply constraints. Russia signaled that peace talks with Ukraine remain highly complex, while Iran is expected to reject a U.S. nuclear proposal that would have eased oil sanctions. Canadian wildfires continue to disrupt over 340,000 bpd of oil sands output, tightening North American supply. Meanwhile, Eurozone inflation cooled, bolstering the case for a potential ECB rate cut, which could support future oil demand. In the U.S., job market softening and tariff pressures cast a shadow on the economic outlook, though API's crude inventory data due at 3:30 p.m. CST may offer fresh direction. Analysts are expecting a 1.0 million barrel drawdown in U.S. crude stockpiles.
