By Hassan Fawaz, Chairman & Founder of GivTrade
Oil prices were moving higher today, rebounding after the recent correction, as trading stayed choppy as the market continued to price supply factors and geopolitical risk tied to the US-Iran nuclear talks. In this regard, another leg of talks was convened next week, with officials signaling some progress but no decisive breakthrough, which reduced fears of an immediate escalation while keeping uncertainty elevated.
However, the upside potential could remain capped by a oversupply expectations. US inventory data showed a very large crude build of about 16 million barrels, reinforcing near term oversupply signals. At the same time, Middle East export flows have been on the increase, with data pointing to the strongest regional exports in years, led by Saudi Arabia and the UAE. Adding to the trend, oil sales under the US-Venezuela arrangement are underway, with US officials expecting sales to reach about USD 2 billion by month end. Additionally, markets could monitor Sunday’s OPEC+ meeting, where the group is expected to consider a production increase of around 137,000 bpd in April, which could add to the volatility and uncertainty about the direction of the market.