Oil Tries to Rebound, Geopolitical Premium Remains
Oil prices edged higher on Friday, as the market reassessed supply risks even as the threat of a US strike on Iran appeared to have eased. Brent edged higher to around US$64.00/barrel, while WTI rose to around US$59.36/barrel in early European trading.
Brent and WTI had previously touched multi-month highs this week after protests in Iran reignited the geopolitical premium. However, the market tone changed after US President Donald Trump said the crackdown in Tehran was easing—a signal that reduced the likelihood of swift military action that could disrupt production or oil shipping routes.
Despite the somewhat easing tensions over Iran, market participants still believe supply this year could remain tight at some point. This comes amid a debate over the outlook: OPEC views the 2026 market as likely to be balanced and 2027 demand is projected to rise at a similar pace to this year, but some analysts remain cautious due to uncertain global production and demand dynamics.
Going forward, the short-term direction of oil prices is expected to remain "disturbed" by two main factors: geopolitical headlines (Iran and the region) and macroeconomic data that shape demand expectations. This means that sentiment can quickly shift—from risk-on to risk-off—based on just one major news event.
Source: Newsmaker.id