Oil fell, but remains within a narrow range as investors monitor the risks of Russian supplies
Oil prices witnessed a slight decline in trading on Tuesday, after achieving strong gains in the previous session of about 2%, as Brent crude fell by 0.08% to 67.60 dollars per barrel, while WTI crude oil fell by 1% to 64.00 dollars per barrel.
Despite this decline, prices remained within a narrow trading range, as geopolitical tensions and supply risks remain a mainstay of the market in the near term.
Main market drivers
1. geopolitical tensions and their impact on supplies
Concerns about supplies have escalated following recent Ukrainian attacks on Russian energy infrastructure, resulting in:
- Disruption of oil processing and export operations in Moscow.
- Causing gasoline shortages in some regions of Russia.
- Increased risk premium in the market due to threats of new US sanctions on Russian exports.
2-expectations of US sanctions
US President Donald Trump has renewed his threats to impose sanctions on Russia if there is no progress towards a peace agreement with Ukraine within the next two weeks.
These threats are looming as an additional pressure factor that may further curb Russian exports, raising concerns about the stability of global supply.
3-global supply and demand forecast
Despite geopolitical concerns, analysts expect global supply to exceed demand in the coming months.
UBS expects global oil demand to peak in August 2025, and then gradually decline by the end of the year, with a slight increase in supply from South America expected.
Technical factors and analyst forecasts
Analysts of IG bank (IG) noted that crude oil price risks tend towards additional gains, especially if the price stays above the resistance level between 64 and 65 dollars per barrel.
They also noted that prices continue to move within a narrow range amid geopolitical volatility and relatively resilient economic fundamentals.
Keep an eye out for US inventory data
Traders are waiting for US inventory data from the American Petroleum Institute (API) today, and from the Energy Information Administration (EIA) tomorrow, Wednesday.
The forecast indicates:
- Decrease in stocks of crude oil and gasoline.
- A possible increase in distillate stocks.
These data may provide important indicators about the trends of domestic demand in the United States, which can affect prices in the short term.
What should be followed in the coming period
Closely monitor the developments of the Russian-Ukrainian conflict and any announcements about US sanctions, they are the main driver of market volatility.
Keep track of US inventory data and weekly reports that may affect prices in the short term.
A possible cut in US interest rates in September may support the prospects for global growth and fuel demand.
Prepare for increased volatility as the market is more influenced by geopolitical news than fundamental factors at the moment.
