Slight Decline in Oil Prices Despite Tensions and Supply Cuts

On Friday, oil prices exhibited a modest downward movement, with the cost of a barrel of North Sea Brent crude falling by 60 cents to stand at 82.37 US dollars. The American variant, West Texas Intermediate, commonly known as WTI, also saw a decrease of 66 cents, trading at 78.28 dollars. Remarkably, the day did not provide significant triggers that would have caused a stronger price swing. An exception was a temporary halt of the significant U.S. oil pipeline Keystone by the operator TC Energy, which caused a transient price increase. However, this interruption was carried out as a preventive measure without incidents related to leaking crude oil. It is interesting to note the reduction in Russian crude oil exports reported by Bloomberg. Such developments have led to the previously exceeded production limits of the OPEC+ alliance being adhered to once again. Carsten Fritsch, analyst and commodity expert at Commerzbank, suggests that this reduction could possibly be of a temporary nature. It may be attributable to seasonal disruptions or impending U.S. sanctions soon taking effect. Meanwhile, the fundamental conditions of the oil market remain relatively steady. Ongoing geopolitical risks, including the Gaza conflict and tense relations in the Middle East, continue to warrant risk premiums and generally support a high price level. However, demand for crude oil and its derivatives such as gasoline and diesel is tempered by a weakening global economy, which keeps OPEC+ supply tight.