Oil prices inched higher on Wednesday, building on the previous session’s strong gains as traders continued to factor in supply disruptions in the United States and Kazakhstan, alongside a weaker U.S. dollar and persistent geopolitical risks.
By 09:00 GMT, Brent crude futures were up 23 cents, or 0.3%, at $67.80 a barrel, while U.S. West Texas Intermediate crude gained 32 cents, or 0.5%, to $62.71. Both benchmarks surged by roughly 3% on Tuesday.
The U.S. dollar remained close to four-year lows against a basket of major currencies, a move that typically supports dollar-denominated commodities by making them cheaper for buyers using other currencies.
On the supply front, market participants estimate that U.S. oil producers lost as much as 2 million barrels per day over the weekend—around 15% of national output—after severe winter weather disrupted production and export flows.
Kazakhstan has also contributed to the tightening supply picture, although the OPEC+ member has indicated that output at the giant Tengiz field should begin to recover gradually within about a week. Meanwhile, the Caspian Pipeline Consortium, which transports roughly 80% of Kazakhstan’s crude exports, has restored full loading capacity at its Black Sea terminal following maintenance at one of its three mooring points that had been damaged by drone attacks, according to sources.
Geopolitical concerns in the Middle East continued to provide a risk premium. U.S. officials said an aircraft carrier strike group has arrived in the region, bolstering President Donald Trump’s ability to protect U.S. forces or potentially take military action against Iran. Analysts at ANZ said the deployment raises the possibility that Trump could act on threats to target Iran’s leadership following a violent crackdown on nationwide protests.
Looking ahead, the OPEC+ alliance—comprising the Organization of the Petroleum Exporting Countries, Russia and other partners—is expected to extend its pause on output increases for March when it meets on February 1, according to delegates from the group.
Attention is also turning to U.S. inventory data. An extended Reuters poll suggested that crude and gasoline stockpiles likely rose in the week to January 23, while distillate inventories were expected to fall. However, industry data from the American Petroleum Institute indicated that crude and gasoline stocks declined last week, while distillate inventories increased. Official government figures are due later on Wednesday.
Leave a Reply