Oil Weakens After Rally: Down on Ample Supply & Geopolitical Risks
Oil prices fell slightly on Wednesday after four consecutive days of strong gains. Brent futures fell about 0.3% to $65.27 per barrel, while WTI fell 0.4% to $60.92 per barrel, as the market began to re-gauge sentiment after earlier gains. The decline was primarily due to rising crude and refined product inventories in the US, with crude stocks reportedly rising by 5.23 million barrels last week, putting downward pressure on prices.
Furthermore, Venezuelan oil exports continued to add to global supply, curbing price increases, although geopolitical tensions remain a concern. Two supertankers carrying crude out of Venezuela raised the view that supply will remain strong in the short term, leading the market to consolidate at current levels.
However, geopolitical risks have not completely disappeared from oil investors' radars. Uncertainty over potential Iranian supply disruptions due to deadly civil protests continues to loom over energy markets, and analysts warn that geopolitical risk premiums could keep markets volatile if the situation worsens. Some analysts have even raised their Brent price outlook to around $70 per barrel in the next three months based on the potential for disruption.
On the other hand, the medium-term outlook remains bearish due to the global oversupply expected to persist this year. The abundant supply has made the market cautious, despite the potential for temporary price spikes due to geopolitical risks.
Overall, the oil market is currently in a "breathing" phase, where short-term supply concerns and long-term supply pressures intersect, causing prices to fluctuate and await new catalysts for their next direction. (az)
Source: Newsmaker.id
