"The market could remain under pressure as traders consider the developments around peace efforts in Eastern Europe. A potential US-brokered framework has led traders to unwind part of the war-risk premium, on the assumption that a future deal could gradually normalise Russia n exports and add to the oversupply risk. In this regard, the latest IEA outlook highlights a structurally bearish backdrop, projecting global supply growth that outpaces demand through 2026 and indicating an oversupply of more than 4 million barrels per day if OPEC+ does not adjust its output."
"However, traders could continue to monitor the impact of the latest US sanctions on Rosneft and Lukoil on Chinese and Indian crude imports. US-Venezuela tensions could also remain a source of risks and could impact the market to a limited extent."
"Macro conditions could contribute to some headwinds. Uncertainty over the Fed's rate-cut timing could dampen risk appetite and cap potential gains, although interest rate cut expectations have returned to the upside. In the very near term, all eyes are on the peace proposal in Eastern Europe; any surprise could inject fresh volatility into crude."
Crude oil prices declined into negative territory after a slide to four-week lows as traders weigh peace efforts in Eastern Europe. A potential US-brokered framework has prompted partial unwinding of the war-risk premium on expectations that a future deal could gradually normalize Russian exports, increasing oversupply risk. The IEA projects global supply growth outpacing demand through 2026 and flags an oversupply exceeding 4 million barrels per day absent OPEC+ output adjustments. Market participants are monitoring US sanctions on Rosneft and Lukoil and US-Venezuela tensions for impacts on Chinese and Indian imports. Fed rate-cut timing uncertainty could dampen risk appetite and cap gains, while any surprise in the peace proposal could inject fresh volatility into crude.
Read at London Business News | Londonlovesbusiness.com
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