Brent crude oil futures continued their decline toward $70 per barrel on Wednesday, pressured by expectations of increased Russian supply.
The drop follows President Vladimir Putin’s agreement to halt attacks on Ukrainian energy sites while rejecting a 30-day ceasefire. Speculation over a potential lifting of Russian sanctions has fueled concerns of a supply surplus, especially as the Organization of the Petroleum Exporting Countries (OPEC) and its allies prepare to increase production next month.
Further downside risks arise from global trade shifts, which could dampen growth and weaken demand. Signs of slowing consumption emerged after industry data revealed a larger-than-expected buildup in crude inventories last week.
However, rising tensions in the Middle East, which threaten supply disruptions from key oil-producing regions, helped cushion some losses.
WTI crude oil futures also extended their decline, falling toward $66 per barrel, similarly pressured by concerns over increased Russian supply.
Meanwhile, the price of the OPEC basket of twelve crudes stood at $72.98 per barrel, down from $73.34 the previous day, according to OPEC Secretariat calculations.
Market Volatility and Key Influences
On Tuesday, Brent crude saw slight gains during intraday trading, testing a key resistance level at $71.35. Support for prices came from:
- Instability in the Middle East
- China’s plans for additional economic stimulus
However, concerns over global economic growth, U.S. tariffs, and uncertainty surrounding Ukraine ceasefire talks limited further gains.
Chinese economic data on Monday offered mixed signals:
- Retail sales growth accelerated in January-February, boosting investor optimism.
- Factory output declined, and the urban unemployment rate hit a two-year high.
- Crude oil throughput in China—the world’s largest crude importer—rose 2.1% year-on-year, driven by a new refinery and increased travel during the Lunar New Year holiday.
Adding to oil market dynamics, President Donald Trump reaffirmed the U.S. stance against Yemen’s Houthi rebels, vowing to continue military actions unless they cease attacks on ships in the Red Sea. He also warned that Iran would be held accountable for any Houthi-led strikes.
Oil markets remain volatile, with geopolitical risks and supply concerns shaping price movements in the near term
