Oil Rises Amid Turmoil, Dollar Drops as a Trigger
Oil prices strengthened as the US dollar headed for its worst weekly performance in approximately seven months. After several days of global markets being rocked by issues surrounding US-Europe relations and the unclear outcome of Ukraine peace talks, market participants again increased positions in energy commodities.
Brent crude briefly moved above $65 per barrel and headed for a fifth weekly gain. At the same time, Bloomberg's gauge of dollar strength weakened, making dollar-denominated commodities feel cheaper to many buyers. However, the market remained sensitive, with US stock futures contracts even weakening as investors spread risk across various assets and regions.
From a geopolitical perspective, the Russia-Ukraine standoff remains a source of uncertainty. US diplomatic contacts with the Kremlin are expected to continue into the weekend, while President Vladimir Putin continues to press demands for Ukrainian territory still controlled by Kyiv—making it difficult for the market to feel truly "calm."
Since the beginning of the year, oil prices have also been supported by risks from several hotspots—from Venezuela to Iran—as well as supply disruptions from Kazakhstan. However, behind these concerns, the market remains overshadowed by concerns about oversupply. The latest IEA monthly report assesses that global supply still has the potential to exceed demand in 2026, although the surplus figure has been revised. In the US, crude oil stocks have also risen in recent weeks, adding to the burden on a longer rally.
Essentially, the weakening dollar is providing some respite for oil prices, but the broader picture is not yet completely free from oversupply pressure. Meanwhile, production at the Tengiz and Korolev fields in Kazakhstan has reportedly not yet returned to normal following power supply disruptions, so the market continues to place a premium on supply risk in the near term. (alg)
Source: Newsmaker.id
