Oil prices weakened again in trading on Thursday (Nov 12), following a brief recovery from earlier pressure. Brent crude stood at US$92.22 per barrel, while WTI was at US$85.86 per barrel; both contracts remain on track for a weekly decline. The downward pressure stems from rising crude oil production, though geopolitical risks are preventing a sharper drop.
Tensions in the Strait of Hormuz have returned to the spotlight following reports that two supertankers were struck by sea mines after traversing an unauthorized route. As a vital artery for global oil shipments, any disruption to shipping activity in the Strait carries the risk of supply constraints.
Meanwhile, OPEC+ crude oil production increased in October—driven largely by higher output from Saudi Arabia—even as shipments through the Strait of Hormuz continue to face disruptions. This rise in production has fueled concerns regarding a potential oversupply, particularly as the demand outlook remains less than robust.
US-Iran tensions also continue to influence the market. Iranian security officials have asserted that Tehran will not allow enriched nuclear material to leave the country, while warning of consequences should the US launch further attacks. For its part, Washington maintains that the nuclear issue remains a critical component of discussions aimed at resolving the conflict.
On a more positive note, developments in talks between Russia and Ukraine have offered a glimmer of hope to the market. Following negotiations in Abu Dhabi, the two nations agreed to a prisoner exchange, though several core issues—including territorial disputes—remain unresolved.
The market is now awaiting official data on US oil and energy product inventories from the Energy Information Administration (EIA). This data will be the next key focus, offering insight into the state of US oil supplies and helping to determine price direction amid the ongoing tug-of-war between geopolitical risks and concerns over oversupply.
Newsmaker Analysis: Oil prices remain caught in a tug-of-war between the pressure from increased OPEC+ production—which has fueled concerns over an oversupply—and geopolitical risks in the Strait of Hormuz that could disrupt global supplies. In the short term, U.S. oil inventory data from the EIA serves as a key catalyst; an increase in stockpiles could intensify downward pressure on Brent and WTI, while a decline might pave the way for a rebound, given the persistent supply risks. (arl)
Source: Newsmaker.id