Brent crude oil prices continued the downward trajectory to $70 on Wednesday, as markets worry about Russia’s re-entrance into the global oil market as tension with the West eases over the conflict in Ukraine.
This decline came after Russian President Vladimir Putin agreed to stop attacking Ukrainian energy sites although he rejected a proposed 30-day ceasefire.
Talks of easing sanctions on Russian oil exports prospects of oversupply. Meanwhile, the Organization of Petroleum Exporting Countries (OPEC) and its allies plan to ramp up production next month.
Global Demand Uncertainty Affects Prices
Oil demand remains uncertain as shifting global trade slows consumption. Industry data last week showed a larger-than-expected buildup in crude stockpiles, pointing to weaker demand.
West Texas Intermediate (WTI) crude oil also fell, nearing $66 per barrel. Meanwhile, OPEC’s daily crude oil price basket dropped to $72.98 per barrel, slightly lower than $73.34 the previous day, according to OPEC Secretariat data.
Brent crude showed slight gains on Tuesday, rising toward $71.35 per barrel, but growth was limited. Investors had hoped for a price boost from instability in the Middle East and China’s plans for new economic stimulus. However, worries about global economic growth, U.S. tariffs, and uncertainty in Ukraine weighed on the market.
China and U.S. Actions Impact Oil Markets
China’s economy showed mixed signals. Retail sales grew in January and February, but factory output fell, and urban unemployment hit a two-year high. Despite this, China’s crude oil processing increased by 2.1% during the same period due to a new refinery and higher demand from Lunar New Year travel.
Meanwhile, U.S. President Donald Trump vowed to continue military action against Yemen’s Houthi rebels despite Russian protestations unless they stop attacking ships in the Red Sea.
He warned that Iran would be held responsible for any Houthi-led assaults.
With multiple uncertainties affecting global supply and demand, oil markets remain volatile.
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