Oil is approaching its highest levels in a month
Oil prices retreated slightly on Thursday in a move that is believed to be profit-taking operations, after touching three-week highs during the previous session.
US crude remains near the level of 64.50 dollars per barrel, amid expectations of a resumption of the upward trajectory after these short-term corrections.
A bullish boost from US stocks and attacks on Russian infrastructure
Weekly data on US inventories formed the main driver of oil's gains this week.
The Official Energy Information Administration data showed a sudden drop in US crude inventories by 3.3 million barrels, far exceeding analysts forecasts, which indicated a decrease of only 956 thousand barrels.
This unexpected decline reinforced the feelings of a shortage of supply in the market.
On the geopolitical side, persistent concerns about supplies contributed to price support, as the intensification of Ukrainian attacks on Russian energy infrastructure fueled the risk of supply disruptions from one of the world's largest producers.
Other factors, such as the suspension of exports from the Kurdistan region of Iraq, have also tightened the noose on global supply.
Blurring the scene between support for geopolitical concerns and supply pressures
Despite the bullish factors, oversupply concerns remain in the minds of traders.
Some analysts expected prices to remain confined to a narrow range, as geopolitical factors act as a support, while expectations of an increase in OPEC supplies in the fourth quarter act as a brake on gains.
Future outlook
Investors are cautious and expect OPEC decisions
As the end of the peak fuel demand season approaches, investor caution signs are beginning to appear on the demand data.
A report by J bank indicated. P. Morgan pointed to a marked slowdown in the growth of the number of air travelers within the United States, as gasoline demand began to decline, reflecting a broader slowdown in travel trends.
The market is waiting with great interest for the upcoming meeting of the OPEC alliance, where the bloc is expected to decide the production policy for next October.
Most analysts expect the alliance to keep current supply levels unchanged, in a move that will provide more clarity on market trends.
While the analysis suggests that the recent gains have been driven by sentiment with more fundamental factors, the developments of the geopolitical landscape and the responses of the major producers will continue to be the decisive factors determining the course of oil in the next few days.
