Oil Prices Retreat as Supply Tightens
Oil prices slipped as market participants focused on easing tensions in the Middle East and rising US inventories. Brent briefly fell below $66 per barrel after rising more than 1% the previous day, while WTI hovered around $62. An agreement in principle between Israel and Hamas for the release of all hostages—part of the US-Qatar-brokered peace efforts—eroded risk premiums, and Donald Trump suggested he might soon visit Israel.
On the fundamental front, official data showed US crude oil inventories rose for a second week, although they remained near seasonal lows. Interestingly, inventories at Cushing, Oklahoma, actually decreased, as did refined product inventories. However, the market remains under pressure due to expectations of higher supply from OPEC+ and producers in the Americas.
Geopolitical factors outside the Middle East remain relevant. Ukraine's attack on Russian oil infrastructure is considered a potential disruption to supply flows, although this is not enough to offset the view that the market balance will be looser going forward. This combination makes it difficult for the price rally to continue, at least in the short term.
Looking ahead, sentiment is likely to be negative due to the projected surplus in the coming months. Several major institutions predict global production will exceed demand—some even see Brent average around the mid-$50s per barrel next year. However, other analysts believe the pace of price declines may be restrained by slowing non-OPEC+ supply growth, OPEC+ policy flexibility, and geopolitical risks in major producers like Russia and Iran. At around 11:57 a.m. Singapore time, Brent for December delivery fell 0.6% to $65.88, and WTI for November delivery fell 0.7% to $62.14. (ads)
Source: Newsmaker.id
