Crude oil prices experienced gains driven by a combination of geopolitical tensions, supply disruptions, and a weakening dollar. However, expectations of oversupply are acting as a limiting factor on further price increases.
- WTI crude oil futures rose more than 2% to about $60.8 per barrel.
- Gains extended for a fifth straight week.
- Renewed warnings from US President Donald Trump toward Iran raised concerns over potential military action that could disrupt oil flows.
- US warships, including an aircraft carrier, are heading to the Middle East.
- Ongoing outages in Kazakhstan’s Tengiz oilfield continue to affect supply.
- The dollar slid toward its worst week in seven months, making crude cheaper for non-US buyers.
- The IEA projects global stockpiles to rise by 3.7 million bpd this year, suggesting oversupply.
These factors present a mixed outlook for oil. The combination of geopolitical uncertainty and supply interruptions tend to push prices upward. However, the projected increase in global stockpiles suggests that the overall supply may still exceed demand, which would limit potential price increases. The weakening dollar provides some support to prices by making crude more affordable for international buyers. Overall, the market is facing countervailing forces, leading to price volatility.