Oil Prices Stabilize Amid Market Optimism and Supply Concerns

Oil prices stabilized after strong gains supported by slowing inflation in the United States and positive demand data,
as markets anticipate “OPEC+” moves and global production levels.

Contents

Production Cut Agreement
Prices
OPEC

Production Cut Agreement

Kazakhstan’s Agreement with Oil Companies to Reduce Production

Oil prices stabilized after recording their biggest gain in two weeks,
supported by slowing inflation in the United States and positive demand data.

Brent crude traded near $71 per barrel after rising 2% on Wednesday,
while West Texas Intermediate (WTI) crude fell below $68 per barrel.

Official data showed that U.S. consumer prices rose at their slowest pace in four months in February,
despite economists’ expectations that the escalating trade war could drive up the prices of goods
such as food and clothing in the coming months.

Prices

Improved Risk Sentiment Supports Prices

Charu Chanana, Chief Investment Strategist at Saxo Markets in Singapore,
stated that “crude oil prices have benefited from improved risk sentiment in the markets.”
However, he warned of persistent risks, particularly regarding global growth and potential tariffs,
which could cloud future price expectations.

Crude oil prices have retreated from their mid-January highs as major oil traders grow more pessimistic
about price forecasts due to supply levels exceeding demand.

The International Energy Agency (IEA) is expected to provide a clearer picture of the situation in its monthly report on Thursday,
following a recent downgrade of U.S. projections regarding supply surpluses.

OPEC

OPEC+ Production Increase and Declining Cushing Inventories

It production increased last month, with Kazakhstan continuing to exceed its production cap,
according to a report issued by the organization on Wednesday.
Kazakhstan announced that it had reached an agreement with global oil companies to reduce production.

In the United States, commercial inventories rose for the second consecutive week,
though the 1.4 million-barrel increase was significantly lower than market expectations.
Meanwhile, inventories in Cushing, Oklahoma— the delivery point for WTI crude—declined by 1.2 million barrels,
marking their first drop in five weeks.

At the same time, price differentials also indicate market improvement.
The premium for Brent crude for next-month delivery over four-month forward contracts widened to $1.42 per barrel
in a bullish backwardation structure, up from a low of $1.04 per barrel last month.

Oil Prices Stabilize Amid Market Optimism and Supply Concerns

Oil Prices Stabilize Amid Market Optimism and Supply Concerns

Related Topics