Oil prices continue to hover near one-month lows after two days of declines as the market assesses the potential for a ceasefire in the Middle East, along with increased crude supplies from OPEC+.
Crude oil futures are currently reflecting reports that efforts could be deployed to discuss a diplomatic resolution to the ongoing conflict.
Suggestions that a ceasefire could be achieved in the coming weeks might ease concerns about further escalation impacting the oil market. This potential resolution could reinforce the bearish sentiment in the market, as traders may expect reduced geopolitical risks, leading to lower prices in the short term.
While oil prices might stabilize after recent declines, significant gains are limited due to a lack of bullish drivers. OPEC+ plans to increase production could weigh on the market, contributing to a bearish outlook in the near term.
While U.S. crude stocks saw an unexpected decline last week, defying expectations for an increase, ongoing weak demand, particularly from China, introduces uncertainty, indicating that the overall sentiment may remain cautious. Traders are now looking forward to the upcoming U.S. government inventory data, which could provide further insights into these trends.
