Oil prices stayed near recent highs
(MENAFN- MENAFNEditorial) Konstantinos Chrysikos Head of Customer Relationship Management at Kudo
Oil prices stayed near recent highs as regional tensions remain present. The latter could continue to threaten energy infrastructure and shipping in the region, supporting crude prices. Tensions between Saudi Arabia and the Houthis leave a critical part of Middle Eastern energy exports under threat, which could affect supply expectations.
However, hopes of progress on the diplomatic front could help limit upside pressures on prices to some extent. The recovery in crude exports from the region has capped gains, as have continued emergency stock releases.
US inventory data showed another large drawdown, the third in a’row. Today’s EIA report could strengthen that signal if it shows another sizeable draw, pushing prices up.
Looking ahead, prices are likely to remain supported while tensions remain elevated in the region. A deterioration in shipping conditions, or another large US draw, could deepen concerns over physical availability and extend gains. Efforts to sustain exports, alongside emergency stock releases, could limit the extent of the rise.
Diplomatic progress will also play a crucial role in shaping prices’ direction. A credible step towards a peace agreement that would reopen Hormuz would remove part of the risk premium, although the lack of clear progress until now suggests that relief is not imminent.
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