Price Trend Summary
| Mar 10 Opening | Mar 21 Closing | Price Change | |
|---|---|---|---|
| Brent Crude | 70.49 | 71.61 | +1.59% |
| WTI Crude | 66.78 | 67.89 | +1.66% |
| Dubai Crude | 70.56 | 72.23 (Mar 20) | N/A |
In the first week, oil prices exhibited a choppy, low-level trend. Initially, they declined on the back of weaker-than-expected U.S. February non-farm payroll data and trade war concerns. Midweek, oil prices rebounded slightly due to lower-than-expected U.S. February CPI, which fueled rate cut expectations, combined with smaller-than-expected increases in crude inventories and larger-than-expected draws in gasoline stocks. Toward the end of the week, tariff-related news added uncertainty, leading to further price fluctuations.
In the second week, oil prices edged higher. Early on, rising tensions in the Middle East provided support: the U.S. launched a new round of airstrikes against Yemen’s Houthi forces, triggering retaliatory actions, and Israel carried out airstrikes on Gaza. These developments heightened geopolitical risks, pushing prices up. Midweek, there were signs of a peaceful resolution in the Russia-Ukraine conflict, with Trump reportedly brokering consensus between the two sides, which briefly pushed oil prices down nearly 1%. However, renewed attacks on energy infrastructure by both sides led to increased volatility. Later in the week, the U.S. announced a fourth round of sanctions on Iran, and OPEC+ revealed compensatory production cuts, supporting a rebound in oil prices, which ultimately rose by around 1–2%.
Crude Oil Data Updates
Seasonal Peak Over, EIA Inventories Continue to Climb
| Mar 14, 2025 | Mar 7, 2025 | Feb 28, 2025 | |
|---|---|---|---|
| Inventory (million barrels) | |||
| Commercial Crude (ex-SPR) | 437.0 (+1.8) | 435.2 (+1.4) | 433.8 |
| Strategic Petroleum Reserve (SPR) | 395.9 (+0.3) | 395.6 (+0.3) | 395.3 |
| Motor Gasoline | 240.6 (-0.5) | 241.1 (-5.7) | 246.8 |
| Distillates | 114.8 (-2.8) | 117.6 (-1.6) | 119.2 |
| Production Activity | |||
| Rig Count | 487 (+1) | 486 (+0) | 486 |
| Refinery Utilization (%) | 86.9 (+0.4) | 86.5 (+0.6) | 85.9 |
Over the past two weeks, commercial crude inventories rose by 3.2 million barrels, while the SPR increased by 600,000 barrels as the U.S. government continued its replenishment program. On the supply side, the number of active rigs rose by one, and refinery utilization climbed by one percentage point to 86.9%. On the demand side, motor gasoline inventories fell by 6.2 million barrels, and distillates declined by 4.4 million barrels, indicating strong end-product demand.
In summary, the increase in commercial crude inventories may reflect relatively abundant supply, while the decline in gasoline and distillate inventories suggests a short-term rebound in demand. The continued rise in rig count and refinery utilization indicates that producers remain optimistic about future demand and are expanding capacity accordingly. In our view, a major breakdown in international oil prices is unlikely in the near term, although the broader bearish trend remains intact. Short-term prices may continue to move within a narrow range near current levels. Key factors to monitor include U.S. trade policy shifts, geopolitical developments in the Middle East, and progress in Russia-Ukraine negotiations.
EIA Lowers Global Output Forecasts, Diverging Demand Views Among OPEC and IEA
| Unit: million barrels | Supply | Demand | |||||||
|---|---|---|---|---|---|---|---|---|---|
| EIA | OPEC (OPEC only) | OPEC (OPEC+) | IEA | EIA | OPEC | IEA | |||
| Global | Forecast | 2024 | 102.78 | 61.5 | 42.3 | - | 102.86 | 103.75 | 102.90 |
| 2025 | 104.17 | 62.7 | 42.5 | 104.50 | 104.13 | 105.2 | 103.90 | ||
| 2026 | 105.78 | 63.9 | 42.7 | - | 105.30 | 106.63 | - |
EIA: In its latest Short-Term Energy Outlook, the EIA revised down global crude oil production forecasts for 2025 and 2026, particularly for OPEC nations, while slightly raising projections for U.S. output. Demand forecasts for 2025 remained unchanged, but the 2026 forecast was revised upward. The report also noted that U.S. crude production could reach a new record this year, further boosting oil consumption.
OPEC: OPEC maintained its global oil demand forecasts for 2025 and 2026. Its monthly report highlighted steady demand growth driven by air travel and noted plans to gradually increase output starting in April. Despite potential market volatility stemming from trade policy uncertainties, OPEC expects global GDP growth to reach 3.1% in 2025 and 3.2% in 2026, emphasizing the role of emerging economies such as India as key demand drivers.
IEA: The IEA lowered its 2025 global oil demand growth forecast and reiterated that the global oil market would remain oversupplied throughout the year. The report cited rising macroeconomic risks stemming from escalating U.S. trade tensions with other countries. Nevertheless, the IEA noted that sanctions on Russian and Iranian oil have yet to significantly impact their export volumes, which remain stable.
Note: The latest EIA and IEA reports did not account for the impact of OPEC's upcoming production increases.
Conclusion
Geopolitical risks continue to support market sentiment, and OPEC's flexible production policy reduces the likelihood of a sharp decline in international oil prices in the near term. However, the broader bearish trend has not yet reversed. Ongoing developments such as adjustments in U.S. trade policies, changes in Middle East geopolitics, and the progress of Russia-Ukraine peace talks will remain key factors to watch.
