Crude oil extended its rally for a third consecutive session today, supported by rising geopolitical tensions, severe winter weather disrupting US output, and a surprise draw in US crude inventories.
Together, these factors kept the market focused on immediate supply risks and sustained the rebound.
Markets reacted to renewed geopolitical risk sin the Middle East. President Trump has renewed pressure on Iran, while a US naval group’s arrival in the region has fuelled disruption fears.
At the same time, Winter Storm Fern has created supply tightness in the US, with estimates of up to 2 million bpd temporarily shut down. The bullish tone was reinforced by EIA data showing US crude inventories fell by 2.3 million barrels, versus expectations for a 1.8 million-barrel build.
Still, the upside remains capped by the 2026 balance. The market could continue to face the risk of an oversupply, which could cap short term gains and weigh on the market long term.
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