Oil prices held relatively steady today near multi-month highs. Uncertainty about developments on the geopolitical front could leave the market directionless in the immediate term.
Market attention is sharply focused on the risks of a new escalation in US-Iran tensions ahead of Thursday’s scheduled talks in Geneva.
Any escalation could threaten tanker traffic through the Strait of Hormuz, a critical chokepoint for seaborne crude.
However, hopes of a diplomatic breakthrough could keep gains in check. Bearish US inventory signals also added some pressure. The American Petroleum Institute reported a sharp jump in crude stocks, approximately 11.4 million barrels for the week ending February 20. Today’s Energy Information Administration data release could weigh on the market to a certain extent if it confirms the build-up.
Looking ahead, the market is also weighing the upcoming OPEC+ policy changes. The group is reportedly leaning toward resuming output increases starting in April, with a formal decision expected at the March 1 meeting. Additional supply could fuel increased concerns about an oversupplied market.
Leave a Comment