"While hopes of a material breakthrough weigh on the market, the risks of a breakdown in negotiations remain present and could fuel new volatility and price increases. Any escalation could threaten flows through the Strait of Hormuz, especially as Washington keeps military pressure elevated and has expanded sanctions targeting networks linked to Iran's oil trade."
"However, the market is confronted with rising US inventories. After the API reported a significant crude buildup, the EIA confirmed a sharp rise of approximately 16 million barrels for the week ended February 20, fuelling some concerns. Supply levels also remain a source of risk as expectations of an oversupply are still present."
"At the same time, Saudi Arabia has been boosting its exports, while OPEC+ meets on March 1 and is expected to consider a modest output increase of around 137,000 bpd in April. The latter could weigh on the market and could help alleviate the impact from geopolitical developments, if any."
Oil prices retreated following US-Iran nuclear negotiations in Geneva, though breakdown risks remain and could trigger volatility. Geopolitical tensions threaten Strait of Hormuz flows, with elevated US military pressure and expanded sanctions on Iran's oil trade. Simultaneously, rising US crude inventories present downward pressure, with the EIA reporting a 16 million barrel increase for the week ended February 20. Supply concerns persist amid expectations of oversupply. Saudi Arabia continues boosting exports while OPEC+ prepares for a March 1 meeting expected to approve a modest 137,000 bpd output increase in April, potentially offsetting geopolitical impacts.
Read at London Business News | Londonlovesbusiness.com
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