By Konstantinos Chrysikos, Head of Customer Relationship Management at Kudotrade
Oil prices remained near yesterday’s close but were volatile. The market is still poised to close the week in negative territory, snapping a six-week winning streak. Current geopolitical developments continue to fuel caution among traders. The meeting between US and Iranian officials in Oman today remains a critical point of concern. While the announcement of the negotiations has eased some fears of US military action in the region and its impact on oil infrastructure, uncertainty remains over the outcome.
On the fundamental side, the market found additional support from the latest data from the US Energy Information Administration, which reported a 3.5-million-barrel draw in crude inventories. However, the medium to long-term outlook increasingly points toward an oversupplied market, weighing on prices and limiting the potential for gains. As a result, the market is likely to return to the downside, unless geopolitical conditions deteriorate further.