Oil Up 1.5% For The Week, Still Under $76 Per Barrel
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Brent crude oil futures have experienced a slight decline, dropping below $76 per barrel, but are still on track for a 1.5% weekly gain.
This price movement is primarily attributed to two factors: supply concerns in Russia and improving demand outlook in the United States and China.
A significant development impacting supply was the reported 30-40% reduction in oil flows through the Caspian Pipeline Consortium (CPC) following a Ukrainian drone attack on a pumping station in southern Russia.
This incident has raised concerns about potential supply disruptions, although Kazakhstan, a major user of the pipeline, has reportedly maintained record oil production levels.
In the United States, recent data showed an increase in crude oil stockpiles, while gasoline and distillate inventories decreased due to seasonal refinery maintenance. This mixed inventory picture has contributed to market volatility.
Geopolitical tensions continue to influence oil markets.
Earlier in the week, relations between Ukraine’s President Zelensky and US President Trump appeared strained. However, Zelensky has since indicated a willingness to negotiate.
Adding to the diplomatic landscape, US Treasury Secretary Bessent suggested the possibility of sanctions relief for Russia if it engages in negotiations to end the Ukraine conflict.
On the demand side, global oil consumption has remained robust, averaging 103.4 million barrels per day through February 19.
Analysts anticipate that cold weather in the US and increased industrial activity in China could further boost demand in the near term.
Looking ahead, the US Energy Information Administration (EIA) forecasts Brent crude oil prices to average $74.50 per barrel in 2025, with a decline to $66.46 per barrel projected for 2026.
However, these projections are subject to significant uncertainty, particularly given the recent geopolitical developments and potential impacts of new sanctions and tariffs.
The oil market remains sensitive to both supply disruptions and demand fluctuations, with geopolitical events continuing to play a crucial role in shaping price movements.
Sources: Trading Economics, MarketScreener