Prices of crude oil remain steady
In recent weeks, oil prices have seen a rollercoaster ride, with fluctuations between $65 and $70 per barrel since early August. This volatility can be attributed to several factors, including geopolitical risks and a surge in production by the OPEC+ alliance.
One of the major sources of geopolitical tension is the ongoing conflict in Ukraine. Last week, Ukraine was identified as the main instigator of attacks on Russian oil facilities, using precision drone and special forces strikes to target key refineries and petrochemical complexes deep within Russian territory. These attacks, aimed at disrupting fuel supplies to the Russian military and weakening Moscow’s war financing, have added to the geopolitical risks affecting oil price behaviour.
Investors are increasingly focusing on potential sanctions against Russia, a major oil producer, as a result of the conflict. The U.S. Federal Reserve's recent decision to cut its interest rate on Wednesday could also have an impact on oil prices, although the exact influence is yet to be fully understood.
In the midst of these uncertainties, the U.S. oil market has seen some interesting developments. Analysts had predicted an increase in U.S. oil reserves, but surprisingly, there was a decrease instead. U.S. crude oil inventories fell by 9.3 million barrels last week, reaching 415.4 million barrels. This decrease could have contributed to the slight rise in both Brent and WTI prices.
As of current market data, the North Sea grade Brent for delivery in November last traded at $68.05, while the price for a barrel of the U.S. grade WTI for delivery in October rose slightly to $64.08.
As geopolitical risks, such as the war in Ukraine, continue to support oil prices, market observers remain vigilant, closely monitoring developments in the ongoing conflict and its potential impact on the oil market.
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