Oil prices are increasing due to escalating geopolitical tensions and a significant drop in US crude inventories. These factors are overshadowing ongoing concerns about demand and OPEC+ production policies.
- WTI crude oil futures rose to around $64 per barrel.
- The increase is attributed to the US downing an Iranian drone and Iranian vessels harassing a US-flagged oil tanker.
- Diplomatic channels between the US and Iran remain open, with talks scheduled.
- US crude inventories reportedly fell by 11.1 million barrels last week.
- OPEC+ anticipates a gradual increase in oil demand from March/April.
- OPEC+ will decide on March 1st whether to resume monthly output increases.
The convergence of these events suggests a potentially volatile period for the oil market. Geopolitical instability is creating upward pressure, while a substantial decrease in crude stockpiles is further reinforcing this trend. However, the market’s future direction hinges on the interplay between these tensions, the decisions made by OPEC+, and the realization of the predicted demand increase.