Brent WTI Report

I nterplay of OPEC+ Production Increases, U.S. Sanctions, and Oil Price Forecasts     The global oil industry is a tangled web of production strategies, geopolitical moves, and economic predictions. Recent events have shed light on the intricate connections between these elements, especially regarding OPEC+’s production choices, U.S. sanctions on Venezuelan oil, and how these factors impact global oil prices. OPEC+ Production Adjustments   OPEC+, which includes oil-producing nations like those in OPEC and allies such as Russia, has revealed plans to boost oil production by 135,000 barrels per day starting in May 2025. This decision comes on the heels of a similar increase in April and aims to gradually restore balance to the global oil market after significant production cuts that began in 2022. Even with stable oil prices, OPEC+ plans to enforce production cuts on members who have previously exceeded their quotas. These planned increases align with low crude oil inventor...

Market Volatility and Price Movements Over the past two weeks, crude oil prices have fluctuated due to shifting supply and demand dynamics, economic indicators, and geopolitical developments. Brent crude settled at $70.06 per barrel on March 4, reflecting a 1.4% decline, while West Texas Intermediate (WTI) crude dropped 0.2% to $68.26 per barrel. Concerns over potential oversupply and slowing economic growth have influenced market sentiment. Demand Outlook and Economic Indicators The International Energy Agency (IEA) revised its global oil demand growth estimate down to 1.03 million barrels per day, citing escalating trade tensions and new U.S. tariffs that could hinder economic expansion. This downward revision has raised concerns about a potential supply surplus. Individual Producer Adjustments Kazakhstan exceeded its OPEC+ production quota in February 2025, hitting record output levels as the Tengiz field ramped up. The country has committed to reducing output in March, April, and M...

Geopolitical Tensions and Supply Concerns In our last update, we highlighted how the start of potential peace talks between the U.S., Russia, and Ukraine on February 12, 2025, caused a decline in crude oil prices due to a decrease in geopolitical risk. However, recent events indicate that this optimism might have been short-lived, as renewed tensions and economic uncertainty are causing fluctuations in Brent and WTI prices.  Despite the initial positive response to peace negotiations, tensions flared again after Ukrainian President Volodymyr Zelensky’s visit to the U.S. on February 28. Rather than strengthening support for Ukraine, his meeting with President Trump led to public disagreements, creating uncertainty about the future of the negotiations. Investors who had hoped for a quick resolution are now faced with adjusting their expectations ( Reuters).       OPEC+ and Economic Pressures At the same time, OPEC+ had planned to ease production cuts in April. How...

 Initaion of Ukraine Peace Talks On February 12, 2025, U.S. President Donald Trump engaged in discussions with Russian President Valdimir Putin and Ukrainian President Volodymyr Zelensky, aiming to negotitate an end to the ongoing Russia-Ukraine conflict. This move has introduced optimism into global markets, suggesting a possible resolution to a war that has significantly disrupted oil supplies and contributed to elevated prices. The prospect of peace has reduced the geopolitical risk premium, leading to a decrease in oil prices. As reported by Reuters, Brent crude futures fell by $1.82 or 2.36% selling at $75.18 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped by $1.95 or 2.66% to $71.37. Efforts to Resume Iraqi oil Exports Simultaneously, Iraq is advancing plans to resume oil exports from its northern region through Turkey's Ceyhan port. Exports had been halted since March 2023 due to a legal dispute, resulting in significant financial losses. Recent budget ame...