Oil Stabilizes, Market Eyes on Russia & US Stockpiles
Oil prices are stabilizing after three consecutive days of declines. Brent is trading below $65 per barrel, and WTI is near $60 per barrel. The market is calculating how much Western sanctions will affect Russia's two largest oil producers, Rosneft and Lukoil. The US, through the Donald Trump administration, plans to enforce these tough sanctions to pressure Vladimir Putin to negotiate an end to the war in Ukraine without exploding oil prices.
On the supply side, US industry data shows national crude oil stocks fell by around 4 million barrels, and gasoline and distillate (diesel/heating fuel) also fell. This is usually a sign of strong energy demand. However, the picture is not entirely bullish: stocks at the key Cushing, Oklahoma, hub actually rose. Market participants are now awaiting official US government stockpiles data, due out Wednesday evening US time.
Additional pressure comes from OPEC+. This alliance of oil producers is expected to continue increasing production and could formalize additional supply at its meeting later this week. The market is concerned about a widening global surplus, which is why oil prices are still on track for a third monthly decline. In Asia, state-owned refineries in India are even considering whether it's still safe to source discounted Russian oil through suppliers who haven't been sanctioned.
Beyond supply issues, risk sentiment is also driven by two major events this week: the Fed meeting and trade diplomacy. The Fed is expected to cut interest rates by 0.25 percentage points, which could shift investor appetite for riskier assets, including energy commodities. Furthermore, President Trump is scheduled to meet with Chinese President Xi Jinping on Thursday, with the prospect of a new trade deal. So, for now, oil hasn't fallen further, but the market is tense, awaiting confirmation: are stocks really down? Can Russia continue exporting? How wide can OPEC+ open the tap? (asd)
Source: Newsmaker.id
