Crude prices have climbed as uncertainty surrounding the Ukraine conflict and strong demand in the United States drive the market higher. On Thursday, Brent crude futures reached nearly a two-week high, increasing by 64 cents or approximately 1 per cent, to settle at $67.48 a barrel by 1012 GMT. Meanwhile, US West Texas Intermediate (WTI) crude futures also saw a similar rise, gaining 65 cents or 1 per cent, to reach $63.36 a barrel.
- As traders continue to monitor both the geopolitical landscape and domestic demand trends, the interplay between these factors will likely dictate the direction of crude prices in the coming weeks.
Both Brent and WTI contracts had already seen gains of over 1 per cent in the previous trading session, reflecting a growing bullish sentiment among traders. Analysts suggest that uncertainty over the ongoing war in Ukraine is lending support to these rising prices, with fresh concerns about potential sanctions on Russia resurfacing.
Russia, on Wednesday, dismissed attempts to address security issues regarding Ukraine without its involvement as a “road to nowhere.” This remark highlights the complexities involved in finding a resolution to the conflict and its potential impact on global oil markets.
Independent analyst Gaurav Sharma noted that although a halt to hostilities in Ukraine could negatively affect crude prices, the current supportive floor for Brent remains at $65 a barrel. This indicates that while there are signs of increasing demand, the geopolitical landscape continues to play a significant role in price fluctuations.
Adding to the market’s dynamics, US President Donald Trump announced a significant tariff of 25 per cent on Indian goods due to India’s continued oil purchases from Russia, which account for nearly 35 per cent of its total oil imports. This move has further complicated the global oil trade, particularly in light of the ongoing tensions between the US and Russia.
Despite the looming potential for tighter sanctions, Russian officials in New Delhi have expressed confidence that oil supplies to India will continue uninterrupted. This assurance may help to stabilise some aspects of the market, even as broader uncertainties persist.
Recent data from the US Energy Information Administration revealed a substantial decrease in US crude inventories, dropping by 6 million barrels last week to a total of 420.7 million barrels. This figure contrasted sharply with expectations of a mere 1.8 million-barrel draw, indicating a stronger-than-anticipated demand. However, Panmure Liberum’s Ashley Kelty cautioned that the rising crude levels at Cushing point to potentially softer underlying demand. He noted that the inventory draw could be attributed to heightened refinery runs and increased exports.
As traders continue to monitor both the geopolitical landscape and domestic demand trends, the interplay between these factors will likely dictate the direction of crude prices in the coming weeks.
