Supply-Side Pressure Keeps Oil Prices Low

Recently, international oil prices have slightly declined, primarily due to Russia agreeing to temporarily stop attacking Ukraine's energy infrastructure. This ceasefire agreement has raised expectations of Russia's oil potentially returning to the market, thus exerting downward pressure on oil prices. Brent crude futures fell by 0.2%, settling at $70.44 per barrel, while U.S. WTI crude futures dropped by 0.2%, to $66.75 per barrel.

Since the outbreak of the Russia-Ukraine conflict, Russian oil exports have been restricted by sanctions, leading to a reduction in supply. With the ceasefire agreement, the market generally expects that if the situation further eases, sanctions could be relaxed, allowing Russian oil supply to increase, which would place downward pressure on oil prices. However, President Putin has only agreed to temporarily stop attacking Ukraine's energy infrastructure, and a comprehensive ceasefire agreement has not been reached, leaving the situation uncertain.

Furthermore, instability in the Middle East continues to affect oil prices. U.S. actions against Yemen's Houthi rebels, Israeli airstrikes on Gaza, and other conflicts have intensified concerns over potential disruptions to oil supply, which has limited the downward movement in oil prices.

Future Oil Price Outlook

In the short term, oil prices may fluctuate within a range, influenced by global economic conditions, geopolitical risks, and other factors. The market will closely monitor the progress of negotiations between Russia and Ukraine, as well as the situation in the Middle East, which may escalate further. If there are more significant supply disruptions, oil prices may rebound quickly.

In the medium to long term, oil prices will continue to face considerable uncertainty. The global economic outlook, changes in demand, and fluctuations in supply will keep influencing the market. Even if Russian oil supply increases, ongoing conflicts in the Middle East and uncertainties in the U.S. economy will continue to put pressure on oil prices. Investors must respond flexibly, stay alert to policy changes and market dynamics, and seize the right opportunities to buy or sell.