Though prices made another run at closing above $64 on Friday, momentum weakened later in the day, leading to a close just under that level. This morning crude remained under pressure, facing resistance as it seeks to push new highs. WTI crude is currently trading at $63.16, down 73 cents.
Weakening crude prices are spilling over to fuel prices as well. Gasoline price are currently trading at $2.0178, down 1.9 cents. Diesel prices are down to $2.0603, a loss of 1.0 cent since Friday’s close.
Russia is in the spotlight this week, as the country continues mulling over its stance on production cuts in the latter half of 2019. Russian Finance Minister Siluanov called current discussions a “dilemma” over whether to continue with production cuts or not. On one hand, continued production cuts ensure American crude keep gaining market share. On the other hand, raising production to cut off American producers would almost certainly lead to a price war wherein crude would fall substantially, perhaps below $50/bbl. Economically, continued cuts are probably more prudent, but domestic politics might make it hard to continue allowing US producers to grow.
The Russian decision will certainly be impacted by decisions the US makes regarding Iran. Japan recently received its final shipment of crude oil before waivers expire, and no further deliveries are currently expected. India has also stopped purchases, claiming they expect further clarification on waivers to come sometime this week. Pundits expect Trump to extend waivers (perhaps at reduced rates) for the eight countries who originally received them, in light of his tweets that oil prices need to come down. But statements from administration officials have been more hawkish, citing favorable market conditions for tightening sanctions on Iran.