Global oil prices significantly extended their gains during trading today, continuing their upward trajectory towards new record highs, with Brent crude nearing the $70 per barrel mark. This rise is driven by anticipation in global markets regarding the potential outcome of US-Iranian negotiations, as well as escalating geopolitical tensions in the Middle East.
In trading details, Brent crude futures for April delivery rose 1.4%, gaining about 96 cents to reach $69.76 a barrel, a level very close to the important psychological and technical barrier of $70. Meanwhile, West Texas Intermediate (WTI) crude futures for March delivery climbed 1.45%, adding 92 cents to settle at $64.89 a barrel by 1:11 PM Mecca time.
Geopolitical tensions and their impact on supplies
Markets are receiving strong support from concerns about the security of energy supplies from the Middle East, a vital artery for global oil. These concerns have intensified following statements by US President Donald Trump indicating he is considering sending a second aircraft carrier to the region. These military moves coincide with diplomatic preparations between Washington and Tehran for a new round of negotiations, creating uncertainty that is prompting investors to add a "risk premium" to crude oil prices.
Historically, tensions in the Arabian Gulf have been a major driver of oil price volatility, as traders fear any potential disruption to shipping through vital straits, making prices highly sensitive to any political statements or military movements.
Inventory data and market forecasts
Regarding fundamental market data, preliminary estimates from the American Petroleum Institute showed a significant increase in US crude oil inventories of 13.4 million barrels during the week ending February 6. While rising inventories typically exert downward pressure on prices, the current buying momentum, driven by geopolitical risks, has outweighed the impact of the inventory data.
Global markets are currently awaiting the release of official and final data from the U.S. Energy Information Administration (EIA) later today to confirm inventory figures and determine the direction of prices in the coming period. The $70 level for Brent crude is a pivotal point that could affect global inflation rates and energy costs for both consumers and industrial sectors.
