Market Tensions Drive Oil Prices Up
The global oil market is on high alert as the latest round of US sanctions on Russian oil tankers sparks concerns over potential supply disruptions. As a result, oil prices have edged higher, with Brent crude futures rising 0.36% to $80.21 a barrel and US West Texas Intermediate crude up 0.43% to $77.83.
Sanctions Uncertainty Weighs on Market
The International Energy Agency (IEA) has warned that the new sanctions could significantly disrupt Russian oil supply and distribution, although the full impact remains uncertain. This lack of clarity is causing market jitters, with analysts struggling to predict the extent of the supply shortfall.
Tanker Troubles Add to Tension
Russian tankers are reportedly struggling to offload their cargoes worldwide, which could lead to short-term tightness in the market. This development has added to the sense of unease, with market strategists citing the uncertainty surrounding Russian supply as a key factor driving prices up.
US Stockpile Draw Supports Prices
Meanwhile, a drop in US crude oil stocks last week has provided some support to prices. According to American Petroleum Institute (API) figures, crude stocks fell by 2.6 million barrels, while gasoline inventories rose by 5.4 million barrels and distillates climbed by 4.88 million barrels.
Global Demand Outlook Revised
The Energy Information Administration (EIA) has trimmed its outlook for global demand in 2025 to 104.1 million barrels per day (bpd), while expecting supply to average 104.4 million bpd. The agency has also predicted that Brent crude will drop 8% to average $74 a barrel in 2025 and fall further to $66 in 2026, with WTI projected to average $70 in 2025, dropping to $62 in 2026.
Market Awaits EIA Data
As the market continues to grapple with the implications of the sanctions, all eyes are on the upcoming stockpile data from the EIA, due to be released at 10:30 a.m. EST (1530 GMT). This data will provide crucial insights into the state of the global oil market and could have a significant impact on prices.
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