FX.co ★ Oil Ticks Down

On Tuesday, WTI crude oil futures dipped below $61 per barrel following a four-day surge. This shift comes as traders assess the implications of OPEC+’s recent decision to halt output increases early in the coming year, juxtaposed with ongoing concerns about oversupply. In December, the organization consented to a minor increase in production but plans to suspend further boosts from January through March in response to seasonal demand variations. This strategy emerges amid forecasts suggesting a potential oil market surplus by 2026, as production escalates among both OPEC and non-OPEC producers. Nonetheless, some analysts warn of continued supply vulnerabilities. Factors such as heightened US sanctions on Russian oil firms Rosneft and Lukoil, accompanied by incessant attacks on Russia’s energy infrastructure, contribute to this risk. Notably, a recent Ukrainian drone assault set a tanker ablaze and crippled multiple loading facilities at the Black Sea port of Tuapse, impacting a Rosneft refinery.