Oil market retreats as supply outlook pressures prices
According to Vijay Valecha, Chief Investment Officer at Century Financial, crude prices have been under pressure this year as the OPEC+ producer group accelerated output increases despite lingering risks of oversupply. The US Department of Energy on Tuesday raised its forecast for this year's global oil surplus to 1.7 million barrels per day, while OPEC maintained a more bullish view, predicting a tighter market ahead. The International Energy Agency's latest projections are due Wednesday.
US industry data indicated a slight increase in nationwide stockpiles last week, with official figures expected later in the day. In Asian trading hours, Brent futures volumes remained subdued, and volatility in the benchmark hovered near a two-week low.
Technically, Brent is trading at $65.7, with resistance at $67.3 (50 SMA) and support at $63.7. US benchmark WTI is holding below the 9 SMA, reflecting a bearish bias. Key support sits at $62.1, with a breakdown potentially opening the way to the $60–$59 range. Resistance is noted at $63.6, and a move above could see prices test $64.3 and $65.1.
The combination of robust supply forecasts, geopolitical developments, and technical resistance levels is likely to keep crude oil trading under pressure in the short term.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Observer
4 hours ago
- Observer
Modi pushes self-reliance amid US tariff tensions
NEW DELHI: Indian Prime Minister Narendra Modi urged the country on Friday to move towards more self-reliance, manufacture everything from fertilisers to jet engines and EV batteries; and vowed to protect farmers in the face of a trade conflict with Washington. With the punishing tariffs imposed on Indian exports by US President Donald Trump expected to hurt growth in the world's fastest growing major economy, Modi announced lower goods and services taxes (GST) from October — a move that could help boost consumption. He also announced India would set up a new defence system called 'Sudarshan Chakra' in the aftermath of India's four-day military conflict with Pakistan in May. He did not elaborate but a government statement said the system is aimed at neutralising enemy infiltrations and enhancing India's offensive capabilities. Indian defence and policy circles have informally referred to the Russian S-400 air defence system — which played a key role during the fighting with Pakistan — as Sudarshan Chakra, after a Hindu mythological weapon. Modi was addressing the nation on the occasion of its Independence Day at a time New Delhi has been struggling with Trump's tariffs and the collapse of trade talks, largely due to differences over imports of American farm and dairy products. "Farmers, fishermen, cattle rearers are our top priorities", Modi said in his customary annual address from the ramparts of the Red Fort in New Delhi. "Modi will stand like a wall against any policy that threatens their interests. India will never compromise when it comes to protecting the interests of our farmers", he said. Last week, Trump imposed an additional 25% tariff on Indian goods, citing New Delhi's continued imports of Russian oil in a move that sharply escalated tensions between the two nations. The new import tax will raise duties on some Indian exports to as high as 50% — among the highest levied on any US trading partner. Modi has never spoken about the tariffs directly, only alluding to them in a speech last week, where he swore to protect the interests of farmers, even if it came at a personal price. Farmers are a key political constituency in India and they violently protested against Modi's last big push to reform the sector, forcing him to repeal three farm laws in 2021 in what was a rare defeat for him. India's Prime Minister Narendra Modi addresses the nation. — Reuters Although local manufacturing and self-reliance have been Modi's key focus areas for years now, the push is seen to have gained urgency amidst ongoing global trade tensions and supply chain disruptions. "The need of the hour is to take a resolve for building a strong India ... I want our traders, shopkeepers to display boards for 'Swadeshi' products", Modi said, using the Hindi word for made in India goods. He said made in India semiconductor chips would hit the market by the end of this year and that India was pushing for self-reliance in producing critical minerals with exploration underway at more than 1,200 locations. Trump's tariffs threaten to disrupt India's access to its largest export market, where shipments totalled nearly $87 billion in 2024, hitting sectors like textiles, footwear, shrimp, gems and jewellery. In retaliation, some supporters of Modi have sought to stoke anti-Modi's promise to cut GST by October's Diwali festival, which encompasses one of India's biggest shopping seasons, follows previous commitments to overhaul it by reducing the number of rate brackets under the 2017 tax regime. A group of ministers have been preparing a report that will consider merging tax slabs and lowering rates on some products. In February, India cut personal income tax for some individuals to boost spending. Earlier this month, the central bank kept interest rates steady, following a 100 basis point cut this year so far. The government has proposed to the ministers' panel that it recommend reducing taxes on mass use items as well as on goods used by women, students and farmers to boost consumption and enhance affordability, the finance ministry said in an X post. The government will move towards making GST a simple tax with two rate slabs, one standard and another merit, it said. Special rates will be applicable only for a few select items. — Reuters
Observer
4 hours ago
- Observer
Kyivstar CEO says peace deal would boost value after historic US listing
NEW YORK: A peaceful resolution to the war between Russia and Ukraine would boost the value of Ukrainian mobile operator Kyivstar 'quite significantly', its CEO Oleksandr Komarov said on Friday ahead of the company's stock market listing in New York. Kyivstar's shares will begin trading on the Nasdaq later on Friday, becoming the first Ukraine-based company listed on a US stock exchange. The listing coincides with a summit between US President Donald Trump and Russian President Vladimir Putin in Alaska, a meeting closely watched by Ukraine and European nations as a potential turning point in peace negotiations. "We will be the best asset for the international investment community to invest in Ukraine, to invest in the Ukrainian recovery, to invest in the Ukrainian support", Komarov said in an interview. Komarov said the company chose Nasdaq, where its parent VEON is also listed, over London or Warsaw because it was even more important to "strengthen the link between the United States and Ukraine rather than between Ukraine and Europe". The company has deepened its US ties during the conflict, appointing former US Secretary of State Mike Pompeo to its board and signing a deal with Elon Musk's Starlink for satellite services. Kyivstar is the biggest mobile operator in Ukraine with 24 million subscribers. Founded in 1994, it became part of Veon in 2010. Apart from telecoms, it owns digital health platform Helsi and ride-hailing firm Uklon. VEON has pitched the listing as an opportunity for foreign investors to bet on Ukraine's reconstruction. But its success hinges in part on a peace deal being achieved. Komarov said that the first few weeks of trading will be extremely volatile. When asked if the outcome of the IPO depends on political developments, he said the volatile external environment was already incorporated in Kyivstar's valuation. Kyivstar, which has been given a pro forma valuation of $2.3 billion, carried out the listing by merging with fintech entrepreneur Betsy Cohen's special purpose acquisition company (SPAC). The company raised $178 million. Reuters earlier reported Kyivstar expected up to $200 million. VEON will retain a majority stake in the mobile operator. Komarov said his firm's Nasdaq debut showed what Ukrainian companies could accomplish by accessing international markets and that prominent Ukrainian businessmen have spoken to him in recent months to hear about Kyivstar's listing strategy. — Reuters
Observer
a day ago
- Observer
Oil price structure narrows, premiums fall as supplies rise
LONDON: Premiums for prompt benchmark oil prices globally are falling compared with those in future months on rising output from the Middle East, Latin America and Europe, just as peak summer demand ends, traders and analysts said on Thursday. Easing concerns that the US could impose more sanctions on Russia and further disrupt oil supplies are also weighing on oil prices, they said. The six-month time spreads for Brent futures, US West Texas Intermediate futures and Middle East marker Dubai have narrowed by more than $1 a barrel in backwardation since the start of the month. Backwardation refers to a market structure where prompt prices are higher than those in future months, indicating tight supply. A narrowing of the structure indicates a market view that supplies are expected to rise. "Brent and Dubai time spreads are softening mainly on expectations of incremental OPEC+ supply from September and easing fears of Russian disruption after recent steady flows via both Baltic and Black Sea," said Shohruh Zukhritdinov, a Dubai-based oil trader. "US crude supply remains stable, but refinery runs will gradually decline into the shoulder season, easing prompt tightness," he said. US President Donald Trump and Russian President Vladimir Putin will meet in Alaska on Friday to strike a ceasefire deal in Ukraine. Citi analysts said Brent could land in the low-$60s per barrel area, if there is progress towards a US-Russia deal. RISING SUPPLY, END OF SUMMER Traders are bracing for more supplies after the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, agreed to increase September output, just as non-OPEC producers such as Guyana, Brazil and Norway launched new production. Peak oil demand during the Northern Hemisphere summer is also ending, cooling red-hot diesel margins in Europe and reducing the burning of crude for power in Saudi Arabia, the sources said. "We saw a lot of selling in the window, with expectation around crude demand revised down as refinery margins weaken as gasoil/diesel cracks unravel," said Harry Tchilinguirian, group head of research at Onyx Capital Group, referring to physical trade in the North Sea market. Danish wind farm developer Orsted said on Monday it plans a $9.4 billion rights issue citing adverse development in the US offshore wind market. "Now that seasonal demand is going to unwind, and we cannot be sure that China will keep up elevated imports (for stockpiling), so where does the extra Saudi barrels go?" Meanwhile, spot premiums for Middle East benchmarks Dubai and Oman hovered at their lowest in more than a month for October-loading supply. Still, Dubai is relatively stronger than Brent, keeping the price spread between the benchmarks - known as the Exchange of Futures for Swaps - narrow and allowing Atlantic Basin supply to head to Asia. Asian refiners have already snapped up millions of barrels of oil from the United States, Africa and Europe for delivery in September and October. Neil Crosby, analyst at Sparta Commodities, said there is still uncertainty over Russian supply with the world's third-largest oil importer India buying spot cargoes to replace Russian oil in recent weeks. "Some (Russian) Urals will go to China but the story is not over yet and there is still some tail risk over what happens to Russian (oil) that cannot clear which makes the EFS trade short term even trickier than normal," he said. — Reuters
