Crude oil recorded some volatility as the market unwinds part of last week’s rebound, which was driven by supply concerns and geopolitical risks, and refocuses on fundamentals.
WTI remained near the levels seen during the last few sessions.
Crude loadings have resumed at Russia’s Novorossiysk terminal on the Black Sea after a Ukrainian drone strike temporarily halted exports on Friday, which put some pressure on the market.
The incident had threatened around 2% of global oil exports and pushed prices temporarily higher.
With this immediate supply risk discounted, the oversupply narrative could return to the forefront.
The latest EIA weekly report showed a 6.4 million-barrel build in US crude inventories, underlining that supply is running ahead of demand. At the same time, the IEA projects a market surplus of more than 4 mb/d by 2026, driven largely by non-OPEC producers such as the US, Brazil, and Canada. OPEC’s recent forecasts also highlight a surplus building into 2026, which could continue to weigh on the market.
