Oil Stabilizes After Spike on Trump's Rhetoric Against Russia
World oil prices stabilized after their biggest spike since July. Market sentiment warmed due to US President Donald Trump's increasingly hawkish statements toward Russia. Trump urged NATO countries to shoot down Russian aircraft violating airspace and called on Europe to halt energy imports from OPEC+ members. These statements increased geopolitical risks and prompted oil investors to trim selling positions.
Brent traded above $69 per barrel after rising 2.5% on Wednesday, while West Texas Intermediate (WTI) hovered around $65. US government data showed crude inventories fell to their lowest level since January, adding to bullish sentiment. However, news that oil companies in Iraqi Kurdistan agreed to resume pipeline exports after a two-year hiatus heightened concerns about oversupply.
According to Haris Khurshid, CIO of Karobaar Capital LP, the oil market is being pulled in two directions. Declining US inventories and supply risks from Russia are supporting price increases, but the resumption of exports from Kurdistan is exerting bearish pressure. He added that Trump's statement could "surprise" the energy market, causing market participants to begin factoring geopolitical risks into prices.
Despite the volatility, oil futures prices have remained within a narrow range since early August. Investors are still weighing geopolitical risks against the bearish fundamental outlook. The International Energy Agency (IEA) predicts a potential supply surplus by the end of the year due to increased production from OPEC+ and other countries, particularly in the United States.
Key Points:
Oil stabilized after a 2.5% surge triggered by Trump's hawkish rhetoric toward Russia.
Brent is above $69 and WTI is nearing $65 per barrel.
US oil inventories fell, supporting bullish sentiment, but Kurdistan exports have again added to supply concerns.
The market is caught between geopolitical risks and the potential for a global production surplus. (ayu)
Source: Newsmaker.id
