The price of WTI Crude Oil (CLJ25) saw a significant increase in the latest trading session, closing at $71.83 per barrel, up 1.58% from the previous session. Price movements showed volatility, with a high of $72.04 and a low of $70.12, while cash settlement closed at $70.70.
Although the current price is above the 5-, 50-, 100-, and 200-day moving averages, short-term trends still face pressure as it remains below the 20-day and year-to-date averages.
Geopolitical Tensions and OPEC+ Decisions
The global oil market is closely monitoring geopolitical developments that could influence oil prices in the short to medium term:
- Saudi Arabia Mediates U.S.-Russia Diplomacy
- Saudi Arabia hosted a meeting with the U.S. and Russian foreign ministers to discuss potential peace negotiations for Ukraine.
- Ukraine Attacks Energy Infrastructure
- Ukraine targeted an oil pipeline in Kazakhstan that contributes 1% of the global oil supply, potentially reducing transit by 30% over the next two months.
- OPEC+ Reviews Production Policies
- Despite speculation about delaying production increases, Russia insists that no such plans exist.
- Brazil has officially joined OPEC+ but is not obligated to cut production.
EIA Data: Rising U.S. Oil Inventories
The latest report from the Energy Information Administration (EIA) as of February 7, 2025, highlights key developments in U.S. oil supply:
- U.S. crude oil imports fell significantly to 6.3 million barrels per day (bpd), down 606,000 bpd from the previous week.
- Crude oil inventories increased by 4.1 million barrels, reaching 427.9 million barrels—about 4% below the 5-year seasonal average.
- U.S. oil production currently stands at 13.494 million bpd, 200,000 bpd lower than the record set in December 2024.
- Crude stockpiles at Cushing, Oklahoma rose by 872,000 barrels, potentially impacting oil futures prices.
Conclusion
The recent rise in oil prices has been driven by a combination of geopolitical factors and OPEC+ policy dynamics. Market uncertainty due to the Russia-Ukraine conflict, along with OPEC+ production decisions, will play a crucial role in determining oil price movements in the near future. Meanwhile, despite rising U.S. oil inventories, the decline in domestic production and lower imports could exert bullish pressure on oil prices in the medium term.
