Brent crude oil futures continued their downward trend, nearing $70 per barrel on Wednesday, driven by expectations of increased Russian supply. This follows President Putin’s agreement to cease attacks on Ukrainian energy sites while rejecting a 30-day ceasefire. The potential easing of Russian sanctions has further fueled worries about a supply surplus, especially as OPEC and its allies prepare to ramp up production next month.
Additional pressure comes from shifting global trade dynamics, which could slow economic growth and reduce oil consumption. Signs of weakening demand were evident after industry data revealed a larger-than-anticipated increase in crude stockpiles last week.
However, escalating tensions in the Middle East, which threaten supply disruptions from major oil-producing regions, have helped mitigate some of the losses.
WTI crude oil futures also fell, approaching $66 per barrel, similarly impacted by the prospect of higher Russian supply.
According to OPEC Secretariat calculations, the price of the OPEC basket of twelve crudes dropped to $72.98 per barrel, down from $73.34 the previous day.
The decline followed a slight intraday rise in Brent crude on Tuesday, as it approached a key resistance level of $71.35. This uptick was supported by Middle East instability and China’s plans for additional economic stimulus, though concerns over global growth, U.S. tariffs, and uncertainty surrounding Ukraine ceasefire talks limited gains.
Recent Chinese economic data showed a rebound in retail sales growth for January-February, offering some optimism, although factory output declined and the urban unemployment rate hit a two-year high. Meanwhile, crude oil throughput in China, the world’s largest crude importer, increased by 2.1% year-on-year in January and February, supported by a new refinery and Lunar New Year holiday travel.
Oil prices also found support from President Donald Trump’s pledge to continue U.S. military actions against Yemen’s Houthi rebels unless they halt attacks on Red Sea shipping. Trump warned that Iran would be held accountable for any attacks carried out by the Houthi group, which it backs in Yemen.
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