– But supply issues remain supportive
London — Crude oil futures were under pressure after a strong rise in the previous session, although crude prices continue to find support due to supply concerns. U.S. sanctions on Russian oil producers and tankers have added to the uncertainty and could tighten the supply landscape.
Additionally, the recent drawdown in U.S. crude oil stocks, further provides support for the market. However, news of a ceasefire in the Middle East has reduced the geopolitical risk premium, tempering price momentum.
On the demand side, global oil consumption continues to rise, driven by strong travel activity in India and China. Nevertheless, demand has slightly underperformed expectations, contributing to market caution. Further demand growth is anticipated, particularly as key events like the Lunar New Year drive seasonal consumption.
Additionally, speculation about potential interest rate cuts by the U.S. Federal Reserve, following easing inflation data, could support economic activity and energy demand. While supply-side factors remain a key driver for crude prices, the slower-than-anticipated demand recovery limits the potential for sustained price increases in the near term.
*George Pavel General Manager at Naga.com Middle East
