Oil prices have stabilized as the market anticipates upcoming US economic data to trigger a breakout from the narrowest trading range in over three years. Brent crude is currently trading near $85 a barrel and has experienced little fluctuation this week, with the smallest range of price movement since early 2021. Traders are closely monitoring various US economic indicators, particularly employment figures, in the coming days to assess their potential impact on oil and broader financial markets.
Despite an unexpected increase in US crude stockpiles, oil prices remained unchanged with West Texas Intermediate hovering below $81 a barrel on Thursday. Despite this, oil is still poised for a monthly gain, and analysts predict further price increases over the next quarter due to seasonal strength. However, there are concerns that the oil market may be influenced by movements in wider stock markets and upcoming elections in Iran and France could introduce additional volatility to prices.
Charu Chanana, a market strategist for Saxo Capital Markets Pte in Singapore, noted that signals for demand for oil are mixed but generally positive with summer travel and cooling demand supporting prices. While US Gulf Coast crude inventories have surged by 2 million barrels, reaching levels not seen since 2020 on a seasonal basis, overall stockpiles are at their highest since April. However, there are indications of weaker fuel consumption as measures of gasoline and jet fuel demand have shown signs of decline.
The oil market remains uncertain as it awaits economic data to provide direction and signals potential shifts in demand and supply that could impact prices in the near term.
