Rising Oil Prices Amid Increasing Demand

SadaNews - Oil prices recorded a slight increase after a two-day decline, as traders awaited U.S. inventory data and assessed indicators of market strength in the near term.

Brent crude rose to $69 per barrel, while West Texas Intermediate crude approached $67.

The structure of the spot market still indicates a tight supply, as the spread between the nearest two Brent contracts remained above 90 cents per barrel in a situation known as "backwardation," reflecting traders' readiness to pay a premium for immediate supplies.

Meanwhile, a preliminary U.S. estimate showed a slight increase in crude inventories, with official data expected to be released later on Wednesday.

Traders are focusing on changes in distillate stocks, which include diesel, after recently hitting their lowest level since 2005.

Despite market fears due to U.S. President Donald Trump's efforts to reshape the global trading system and rising "OPEC+" production, oil recorded gains in July, following increases in May and June.

Goldman Sachs raised its Brent price forecast for the second half of the year this week, but maintained a cautious outlook for 2026.

Expectations for Short-Term Price Increases

Robert Rennie, Head of Commodity and Carbon Research at Westpac, said: "In the very short term, the price risks still lean towards the upside," indicating initial signs of a return to global inventory growth due to increased production.

He added: "Therefore, we believe that inventory will put pressure on prices, keeping a ceiling on Brent above the $70 level."

Despite the accumulation of global inventories in recent months, Morgan Stanley indicated that most of these increases occurred in markets with limited impact on futures prices.

Analysts at the bank, including Martijn Rats, stated that "the Brent futures curve clearly indicates a decline over the first four to six months, a pattern that usually reflects tightness in the market."

They noted that "the increases in inventory have been concentrated in the Pacific region, while Brent crude is priced in the Atlantic."