According to data from the American Petroleum Institute (API), as of last week, commercial crude oil inventories in the United States increased by 3.3 million barrels. If official data from the US Energy Information Administration (EIA) confirms this growth on Thursday, it will be the fourth consecutive week of inventory increase. This indicates that the domestic market demand in the United States is still weak, which has somewhat suppressed the upward trend of oil prices.

However, despite inventory growth, oil prices still recorded a slight increase this week. As of now, West Texas Intermediate (WTI) crude oil has fluctuated slightly around $71 per barrel, while Brent crude oil has remained above $76 per barrel.

OPEC+may delay production increase, supply shortage expectation still exists

The market generally expects that OPEC+may postpone the production increase measures originally planned to be launched in the second quarter of 2025 to cope with weak demand and supply side uncertainty. This decision may help support oil prices and prevent market supply-demand imbalances.

At the same time, Kazakhstan's crude oil exports have been restricted due to drone attacks from Ukraine, and the Group of Seven (G7) is discussing whether to further tighten restrictions on the upper limit of Russian oil prices, all of which have increased market expectations of tight supply.

The intensification of geopolitical risks affects market expectations

US President Trump's recent statements on foreign policy have intensified market uncertainty. In his public opening, he called Ukrainian President Zelensky "dictator", triggering speculation about the future position of the United States in the Russia-Ukraine conflict. The market is concerned that if Russia and Ukraine reach some kind of peace agreement, it may lead to a relaxation of Western sanctions on Russian oil, thereby affecting the global crude oil supply pattern.

At the same time, crude oil exports from Iraq's Kurdish region may resume this week, but Türkiye has not yet confirmed the resumption of pipeline transportation to Ceyhan energy hub. This variable may also affect the stability of the short-term supply side.

Oil price trend analysis: supply uncertainty remains a key factor

At present, WTI oil prices are fluctuating around $71.80 per barrel, while Brent crude oil remains around $75.80 per barrel. Market sentiment tends to stabilize, but overall volatility has decreased, indicating investors' gradual adaptation to recent supply side uncertainty.

The market is still affected by supply side uncertainty, and OPEC+'s decision to increase production, the Russia Ukraine situation, and changes in US production are all key factors determining future oil prices—— Industry analyst

From a technical perspective, short-term prices are still below the moving average, and this rebound is only a correction to technical indicators, not a reversal. If EIA inventory data continues to rise, the possibility of oil prices falling again cannot be ruled out. In the short term, pay attention to whether the price stabilizes at $72 per barrel.

Editor's viewpoint:

In the short term, oil prices are still being pulled by multiple factors. Although the increase in US production and inventory is putting pressure on prices, the delay in OPEC+production, uncertainty in the Russia Ukraine situation, and potential disruptions in the global supply chain are still supporting oil prices.

The key to the market lies in the final decision of OPEC+. If the organization maintains its current production level or even continues to cut supply, oil prices may continue to rise steadily. If global economic demand recovers slowly, the upward space for oil prices will also be limited. Investors need to closely monitor OPEC+policy signals and changes in US production in the coming weeks to assess the medium-term trend of the oil market.