Oil prices set for second straight weekly drop on signs of growing supply surplus
For the week, Brent and WTI were both on track for a drop of about 2.5%
Oil prices are expected to continue their second consecutive weekly decline as global supply surplus signs emerge, coupled with geopolitical tensions. Brent and West Texas Intermediate (WTI) futures both saw drops of about 2.5% for the week, settling at $95.84 and $88.56 per barrel, respectively. The International Energy Agency's recent report highlighted a rising global oil surplus, adding to the market's focus on this development.
Phil Flynn, a senior analyst, noted that earlier fears of shortage have been replaced by concerns over surplus. The US-Israeli conflict against Iran and attacks on Saudi Arabian infrastructure by Iran-backed Houthis, as well as tanker attacks in the Gulf, have also contributed to the market's shift. Softening US demand, driven by increased crude oil and fuel inventories, has further impacted oil prices.
Despite the price decline, there remain risks for oil shipments out of the Strait of Hormuz, a crucial waterway for Middle East producers. Iran's military reported explosions targeting four oil tankers in the area, while the Houthis claimed attacks on Saudi infrastructure.
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