Lagos — Crude oil futures returned to the downside after a rebound yesterday. The market could continue to see risks as traders reassessed recent supply disruptions and geopolitical risks. Production outages fueled some concerns about supply levels but could only provide temporary support to the market. Production was halted at Norway’s Johan Sverdrup oilfield alongside reduced output at Kazakhstan’s Tengiz field, which was temporarily halted due to ongoing repairs, and have initially lifted prices. However, investor sentiment remains cautious amid heightened geopolitical tensions, particularly as concerns around the conflict in Eastern Europe increase.
However, the market could see increased downward pressure as production levels return to their initial levels in the coming days. At the same time, concerns about demand levels on a global scale could continue to weigh on prices in addition to potential production increases in the US over the medium to long term. Traders could turn to new data regarding crude oil inventory data in the US tomorrow. Higher-than-expected increases in oil stock data could raise increasing fears around demand levels and could push oil prices further down. Under these conditions, oil prices could be heading toward September’s lows.
*George Pavel General Manager at Naga.com Middle East
