By Daniel Takieddine, Co-founder and CEO, Sky Links Capital Group
Oil prices retreated after a five-session rebound as concerns about the geopolitical situation in the Middle East abated to some extent. The announcement that the US administration has put its latest move in the area on hold tempered immediate fears of supply disruption in an important oil-producing region.
However, geopolitical risk has not disappeared. Tensions across major producing regions remain elevated, and developments in Eastern Europe and Latin America continue to inject uncertainty into energy supply chains.
In parallel, US crude inventory data showed a strong increase in stockpiles, reinforcing the perception that physical inventory remains plentiful and that recent gains were running ahead of underlying demand conditions.
Looking ahead, any renewed escalation in the Middle East or other producing regions would quickly push crude prices back to the upside. However, over the long term, the concerns over an oversupplied market remain a weight on prices and could pull oil toward new lows if geopolitical risks abate more consistently.