Brent stable amid persistent oversupply worries

The front-month ICE Brent contract has inched $0.03/bbl higher on the day, to trade at $61.13/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Geopolitical conflicts have put upward pressure on Brent crude this week, after two big Russian oil companies were sanctioned by the UK.

This comes as tensions take a toll following US President Donald Trump’s latest remarks on the war. Trump has urged Ukrainian President Volodymyr Zelensky to accept Russia’s terms in a tense meeting on Friday, Reuters reported, citing two people briefed on the discussion.

This major shift in stance by the US at such a critical juncture could prompt retaliatory moves from its European allies, including the EU and the UK, which may respond by imposing additional sanctions on Russian energy exports.

“We see Trump far more inclined to push for a rapprochement, however superficial, than to escalate the fight,” VANDA Insights’ founder Vandana Hari remarked. “The tail risk is a failed push that triggers fierce retaliating and a resurgent supply risk premium,” she added.

Downward pressure:

Brent crude’s price gains were capped amid growing market focus on signs of oversupply.

A Bloomberg report citing data from tanker tracking firm Vortexa showed more than 1 billion bbls of oil are in transit, adding some bearish sentiment to the market.

This is notably the highest level since 2020, the report added.

“Crude oil edged lower amid mounting evidence that the long-awaited surplus is finally starting to emerge,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

By Aparupa Mazumder

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