Stability of Oil Prices After Recording Largest Daily Increase Since July

SadaNews - Oil prices stabilized after recording their largest daily increase since July yesterday, driven by hawkish statements from US President Donald Trump regarding Russia, which raised geopolitical concerns in the market.

Brent crude rose to trade above $69 per barrel, after jumping by 2.5% on Wednesday's session, while West Texas Intermediate crude approached $65. These movements came after Trump called on NATO member countries to shoot down Russian planes violating their airspace, and urged Europe to stop importing energy from Russia, a member of the OPEC+ alliance, prompting investors to reduce their bets on falling prices.

At the same time, US government data showed a decline in crude inventories to the lowest level since January, which supported the upward price trend.

However, concerns about a supply surplus renewed after oil companies operating in the Kurdistan region of Iraq reached an agreement with the federal and regional governments to resume oil exports via the pipeline that has been halted for more than two years.

Iraqi Foreign Minister Fouad Hussein stated that oil exports from the Kurdistan region "are likely to resume this week," pointing out that future flows could reach 500,000 barrels per day with new investments and additional fields. According to informed sources, the initial quantity is expected to be about 230,000 barrels per day.

Haris Khurshid, investment director at Karobar Capital in Chicago, stated that "the oil market is being pulled by conflicting factors at the moment. The decline in US inventories and Russian supply risks support the upward trend, but the resumption of Kurdistan's exports poses a bearish pressure." He noted that Trump's statements could "raise concerns in the markets" and prompt traders to "price in risks early."

Despite the recent movements, oil contracts have remained stuck in a narrow range since early August, as traders attempt to balance weak fundamentals with rising geopolitical tensions. Analysts led by the International Energy Agency expect a supply surplus to occur later in the year due to increased production from OPEC+ and beyond, particularly in the Americas.

In a notable development, two major oil export ports on the Russian Black Sea coast have temporarily suspended loading operations following overnight warnings of drone attacks, as part of a Ukrainian escalation aimed at targeting Moscow's sources of funding.

For its part, Goldman Sachs ruled out a complete European ban on Russian oil imports, noting that some countries like Hungary and Slovakia rely heavily on these supplies and do not have sufficient incentives to support such a decision.