"Oil prices staged a rebound today, recovering from their recent five-month lows. The market reacted positively to the news that the US Department of Energy is seeking to purchase approximately 1 million barrels for the Strategic Petroleum Reserve (SPR). Additionally, the potential for a US-India deal that may cut Russian flows and tighten the market lifted prices. Hopes regarding US-China trade improvement could support demand expectations and help improve the outlook."
"However, the market could face a persistent global supply surplus, driven by record-high US production and OPEC+'s commitment to planned output increases. These factors, combined with forecasts from major agencies pointing to continued inventory builds and slower global demand growth, could cap significant price gains. Near-term, the market's direction could be influenced by the EIA Weekly Petroleum Status Report. A change in the forecasted supply-demand equilibrium or a strong draw could support the rebound in oil prices."
Oil prices recovered from five-month lows after news of a US Department of Energy purchase request for about 1 million barrels for the Strategic Petroleum Reserve and prospects of a US-India deal that could reduce Russian flows. Expectations of improved US-China trade also supported demand optimism. Offsetting these bullish factors, a persistent global supply surplus driven by record-high US production and OPEC+'s planned output increases remains a major constraint. Major agency forecasts indicate continued inventory builds and slower demand growth, which could cap price gains. Near-term direction hinges on the EIA Weekly Petroleum Status Report and any strong inventory draw.
Read at London Business News | Londonlovesbusiness.com
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