Oil Prices Surge Amidst Demand, Supply Uncertainties
In the global commodity market, the prices of crude oil increased week-on-week (W.o.W), supported by lingering geopolitical uncertainty in the Middle East, although signs of softer demand capped further gains.
International benchmark Brent crude traded at $69.24 per barrel, up 2.3% from last Friday’s close of $67.66. US benchmark West Texas Intermediate (WTI) rose 2.3% to $64.75 per barrel, compared with $63.31 a week earlier.
Prices wavered earlier in the week after US and Iranian officials signaled that negotiations over Tehran’s nuclear program would continue following indirect talks in Muscat, Oman’s capital.
US President Donald Trump described the discussions as “very good,” saying Iran had shown willingness to reach a new agreement. Iranian President Masoud Pezeshkian also characterized the talks as a step forward.
The diplomatic momentum eased concerns about potential disruptions from Iran, a major oil producer located along the Strait of Hormuz, a vital route for global crude shipments.
Still, the situation remains fragile. Trump said he was considering deploying a second aircraft carrier strike group to the region if talks fail.
“Either we will reach a deal, or we will have to take very tough measures like last time,” Trump said, adding he hoped a second round of talks would be held next week.
US and Iranian officials met in Oman on Feb. 6 and described the discussions as constructive. That lingering uncertainty has helped keep a geopolitical risk premium in prices, allowing oil to hold onto weekly gains.
On the demand side, however, data pointed to softer consumption.
Data from the US Energy Information Administration showed commercial crude inventories rose by about 8.5 million barrels in the week ending Feb. 6, far exceeding expectations of a modest increase. Gasoline stocks also climbed, raising concerns about fuel consumption in the world’s largest oil consumer.
Economic signals from China, the second-largest oil consumer, added to the cautious tone. Consumer prices rose just 0.2% year-on-year in January, while producer prices fell 1.4%, highlighting ongoing deflationary pressure.
Analysts said the data suggested subdued spending and weak industrial momentum, which limited the upside potential for crude.
Further dampening sentiment, the International Energy Agency revised down its 2026 global oil demand growth forecast by about 83,000 barrels per day. The agency now expects demand to rise by roughly 849,000 barrels per day this year to 104.87 million barrels per day, citing seasonal weakness and a modest economic outlook.
Global demand typically dips in January, and the agency noted consumption fell by around 2.7 million barrels per day month on month during the period.
Despite those headwinds, geopolitical uncertainty has provided enough support to keep oil on track for a weekly gain.
Trump said Thursday he expects a deal with Iran could take shape within a month, but warned that failure to reach an agreement would carry serious consequences.
Asked by a reporter at the White House about the timeline he envisions for a deal to be ironed out, the US president said, “I guess over the next month, something like that, should happen quickly.”
“We have to make a deal; otherwise, it’s going to be very traumatic, very traumatic. I don’t want that to happen, but we have to make a deal.
“They should have made a deal the first time. They got Midnight Hammer instead, and this will be very traumatic for Iran if they don’t make a deal,” he said, referring to US strikes on Iran’s nuclear facilities last June.
While stepped-up diplomacy has eased immediate fears of supply disruptions in the Middle East, traders remain cautious, balancing fragile negotiations against a cooling demand outlook. Lagos Improves Tenancy Laws to Attract Investment
