Global oil prices experienced a significant surge, reaching their highest point in nearly a month, driven by a confluence of factors. Brent crude, the international benchmark, climbed above $69 a barrel, extending its upward trajectory for the fourth consecutive day.
This rally is largely attributed to increased technical buying activity in the market, as investors anticipate the upcoming OPEC+ meeting scheduled for this weekend.
Analysts suggest that trend-following Commodity Trading Advisors have been steadily accumulating crude oil positions over recent weeks, contributing significantly to the price increase. This buying spree is expected to continue in the short term.
The OPEC+ meeting holds crucial significance, as the cartel will decide on its oil production levels for October. While most market observers predict the group will maintain its current output, the decision remains a key factor influencing market sentiment and price volatility. Uncertainty surrounding the outcome adds to the current bullish momentum.
Adding further complexity to the equation is the ongoing geopolitical situation surrounding Russia. The United States is reportedly considering additional sanctions against Russia, targeting its oil exports, particularly to major importers like India.
This potential escalation of the conflict adds a significant geopolitical premium to oil prices, reflecting the uncertainty surrounding future supply availability. Treasury Secretary Scott Bessent confirmed Washington’s consideration of these sanctions this week.
Despite the recent rally, the overall oil market remains cautiously optimistic. While prices have shown strength, they have largely remained within a range of $65 to $70 per barrel in recent weeks. Concerns linger about a potential future surplus stemming from previous OPEC+ decisions to ease supply curbs and the impact of trade tensions on global energy demand.
However, analysts note a perceptible shift in market sentiment, moving from pessimism to a more neutral outlook, primarily due to the lingering geopolitical instability.
