Oil prices are on track for a modest weekly gain, with a focus on supply outlooks and inflation trends shaping market sentiment. Brent crude traded near $83.56 per barrel, marking a 1.1% increase this week, while West Texas Intermediate (WTI) crude was priced at $78.2 per barrel.
Influencing Factors
The recent rise in oil prices has been supported by lower US crude stockpiles and indications that US inflation may be easing. These positive signs have been counterbalanced by forecasts of weaker demand growth from organizations such as the International Energy Agency (IEA), as reported by Bloomberg.
This week’s price action has been relatively muted, with competing drivers largely offsetting each other. This equilibrium has resulted in the narrowest weekly trading range for Brent crude—less than $3 per barrel—since March. Additionally, technical factors are influencing the market, with prices hovering close to the 100-day moving average.
Market Analysis
According to Priyanka Sachdeva, a senior market analyst at brokerage Phillip Nova Pte, the oil market this week has been akin to “a crossword puzzle of mismatched demand-and-supply forecasts” from OPEC and the IEA. Despite softer US inflation data, uncertainty remains regarding the pace and timing of potential rate cuts by the US Federal Reserve.
Year-to-Date Performance and Future Outlook
Crude oil prices remain higher for the year to date, although they have declined since April as the geopolitical risk premium from Middle East tensions has subsided. Looking ahead, the OPEC+ meeting on June 1 is anticipated to result in the group maintaining existing production cuts. Some members are also expected to seek upgrades to their acknowledged capacity levels.
