Crude oil prices have risen for three consecutive weeks, driven by a combination of strong seasonal demand, supply constraints, and geopolitical risks, although economic uncertainties and inventory data have tempered the rally.
Crude oil futures reached their highest levels since October earlier this week, and the momentum wasn't slowing as of Friday morning. WTI and Brent were trading at $74.58 and $77.59 respectively at the time of writing, with traders assessing the interplay of seasonal demand, supply constraints, and mixed inventory data as the week draws to a close. Despite the recent rise in prices, traders remain cautious about balancing tightening supply and uncertain demand signals.
production dropped by 50,000 barrels per day bpd in December, largely due to maintenance in the UAE and declining Iranian output. These reductions align with 's broader commitment to cut production, ensuring supply remains constrained. Saudi Arabia and Iraq maintained steady production levels, adhering to the cartel's strategy to limit global availability. Adding to the supply squeeze, Western sanctions on Russian crude shipments continued to bite. Efforts by the Biden administration to restrict Russian exports, coupled with expectations of a 300,000 bpd decline in Iranian production, amplified concerns over global supply.
cuts and geopolitical risks, continue to underpin the market. Seasonal demand and robust refinery activity in the U.S. provide additional tailwinds for prices. However, traders remain cautious. Inventory builds, global economic uncertainties, and a stronger dollar could temper upside momentum. Any unexpected demand weakness or larger-than-anticipated inventory increases may further cap potential gains.
Crude Oil Demand Supply OPEC+ Sanctions Weather Inventory Economy Trading Volatility
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