Oil Prices Close Week Lower over Demand, Supply Uncertainties
Prices of crude oil were lower week on week over uncertainties around demand and supply. This week, crude oil prices were weighed primarily by persistent concerns over global oil demand.
Also, the commodity market was weighed by uncertainties surrounding the US Federal Reserve’s (Fed) policy path, while early signs of progress in Russia-Ukraine peace efforts tempered losses.
Brent crude traded at $61.02 per barrel, down 4.1% from last Friday’s close of $63.64. US benchmark West Texas Intermediate (WTI) was at $57.37 per barrel, falling around 4.3% compared with $59.93 last week.
This week’s declines were led by expectations that weaker economic activity could limit consumption, even as the Fed’s long-anticipated rate cut materialised.
Analysts said markets continued to question how much monetary easing would follow after the 25 basis-point cut, with inflation risks and strong US economic indicators suggesting limited policy flexibility ahead.
Meanwhile, US Energy Information Administration data reinforced demand-side pressures, showing that despite a sharper-than-expected draw in crude stocks, rising gasoline and distillate inventories pointed to a seasonal slowdown in product use—the latest sign of cooling consumption in the world’s largest oil-using economy.
Diplomatic moves aimed at advancing peace between Russia and Ukraine also weighed on prices through the week. European leaders met in London to support negotiations, and Ukrainian President Volodymyr Zelenskyy said they were preparing to present a revised peace plan to Washington.
A potential Russia-Ukraine ceasefire could ease restrictions on Russian exports, with European and Ukrainian officials pushing ahead with a revised peace plan.
Despite the overall decline prices were cushioned by geopolitical tensions and supply risks, particularly involving Venezuela and Russia.
Trump signaled intensified action against what Washington says are drug-linked crude shipments from Venezuela, following the seizure of a large tanker.
Expectations that more vessels could be targeted raised fears of supply disruptions, while the US said the seized ship had been carrying oil for Iran’s sanctioned Islamic Revolutionary Guard Corps, adding to regional risk.
Concerns over Russian supply also supported prices, as continued attacks on Ukrainian infrastructure and slow-moving peace talks kept uncertainty elevated.
A substantial US crude inventory draw—backed by the American Petroleum Institute’s 4.8-million-barrel estimate—and strong market pricing for a Fed rate cut provided additional support.
On Wednesday Fed cut its policy rate by 25 basis points, as expected, to a range of 3.5-3.75% while stating that it would carefully examine incoming data, the evolving outlook and the balance of risks when assessing the scope and timing of further adjustments to interest rates.
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