Lagos — On Friday, crude oil futures started the day at higher prices, bolstered by geopolitical tensions and worries about supplies.
Nevertheless, traders continue to show caution, potentially resulting in intra-day fluctuations as they gauge the actual implications of these events. New American sanctions against Iran have increased anticipation for more restricted worldwide supplies.
Moreover, OPEC+ introduced a strategy to reduce excessive output levels, strengthening beliefs about decreased supply. Should these production reductions persist for an extended period, they might provide extra backing to the market, aiding in a more substantial recovery of prices.
Although both Brent and WTI were poised for weekly increases, the future remains unpredictable. The demand for crude oil in China will play a crucial role in maintaining price steadiness, as economic factors affect worldwide consumption patterns.
Should demand increase, prices might remain robust; however, indications of diminished usage or greater output from non-OPEC sources could lead to price fluctuations.
*Joseph Dahrieh, Managing Principal at Tickmill
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