Global Oil Prices Under Pressure, Fed Support Insufficient
Global oil prices experienced downward pressure today, fueled by growing market concerns about a global oversupply and a resurgence in Iraqi oil exports from the Kurdish region.
According to a Reuters report, oil prices continued to weaken following news that the Iraqi federal government and the Kurdish regional government had agreed to reopen an oil export pipeline through Turkey, which had been suspended since March 2023. The additional exports, reaching 230,000 barrels per day, are seen as a factor in increasing supply to the global market.
Furthermore, despite some initial support from a decline in US crude oil inventories, supply-side pressures appear to be more dominant. Concerns that OPEC+ will ease production cuts while global demand has not yet fully recovered underpin today's downward movement.
Some analysts say the oil market is currently in a phase where fundamental oversupply is beginning to outweigh the support from loose monetary policy. Even though the Fed has cut interest rates, the positive effect on oil demand is considered insufficient to stem the price decline.
In the short term, the market will now be closely monitoring official US stockpile data (EIA), OPEC/other producer movements, and global economic signals. If supply becomes more abundant and demand disappoints, the downward pressure trend is likely to continue.
Source: Newsmaker.id
