Oil prices continued their strong upward momentum, driven by escalating supply risks and a sustained decline in US crude inventories, marking the longest streak of draws since 2021.
West Texas Intermediate (WTI) surpassed $80 per barrel, extending its gains after climbing more than 3% on Wednesday, reaching its highest level since July. Brent crude followed closely, settling near $82. The market has been shaken by a new wave of US sanctions targeting Russia’s energy sector, prompting the International Energy Agency (IEA) to caution that the measures could “significantly disrupt” the country’s supply and distribution networks.
The rally, which has gathered pace since the start of the year, is being fueled by several factors. A cold Northern Hemisphere winter has bolstered demand for heating fuels, while US crude inventories have been steadily declining. Official data released Wednesday revealed that US oil stockpiles fell for the eighth consecutive week, hitting their lowest levels since April 2022.
Geopolitical tensions have also heightened market concerns. In addition to sanctions against OPEC+ member Russia, traders are bracing for potential policy shifts under the incoming Trump administration. Analysts anticipate stricter sanctions on Iran and the possibility of new trade levies that could disrupt global oil exports.
The confluence of tightening supply and geopolitical uncertainty has kept upward pressure on oil prices, underscoring the market’s vulnerability to further disruptions. As global energy dynamics remain in flux, traders and policymakers alike are closely monitoring the situation.
Related topic:
GE Vernova Shares Rise as Bank of America Raises Price Target
