Brent dips as easing geopolitical tensions offset supply concerns
The front-month ICE Brent contract has inched lower by $0.28/bbl, to trade at $64.65/bbl at 09.00 GMT.
IMAGE: (L-R) Russia, Saudi and US flags against oil pump and oil refining factory at night. Getty Images
Upward pressure:
Brent has remained relatively steady in the past week, as concerns around supply disruption and the International Energy Agency’s (IEA) revised oil demand growth outlook have supported the benchmark.
The IEA has revised its oil demand growth forecast for 2026 up from 860,000 b/d to 930,000 b/d, adding some support to Brent’s price.
Supply disruption concerns have resurfaced after Kazakhstan halted output at its Tengiz and Korolev oilfields after power disruptions. Kazakhstan produced 35% less crude per day in the first 12 days of January than on average in December, according to Reuters.
Downward pressure:
The US, Russia and Ukraine will hold a trilateral meeting in the UAE, Ukraine’s President, Volodymyr Zelenskyy confirmed in a social media post.
“Any breakthrough to end Russia’s war in Ukraine could see an end to US sanctions on Russia that have curtailed oil flows,” Daniel Hynes, senior commodity strategist at ANZ said.
US President Donald Trump has rescinded tariff threats against nations that oppose his plans to acquire the island after claiming that his ambitions for Greenland were headed toward a negotiated solution.
“Based upon a very productive meeting that I have had with the Secretary General of NATO, Mark Rutte, we have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region,” Trump said in a social media post.
US commercial crude stocks have increased by 3.60 million bbls in the week ending 16 January to 426 million bbls, according to the Energy Information Administration. This is slightly higher than the American Petroleum Institute’s estimate of a 3.04 million-bbl build.
By Konica Bhatt
Please get in touch with comments or additional info to news@engine.online
