Over the past month, the global oil landscape has witnessed significant shifts, marked by rising U.S. crude oil inventories and geopolitical tensions impacting supply routes. The American Petroleum Institute (API) reported a substantial increase in U.S. crude oil inventories, with a rise of 3.34 million barrels during the week ending February 14, surpassing analysts' expectations of 2.2 million barrels. Concurrently, a drone attack in Russia has disrupted the flow of oil from Kazakhstan, exacerbating supply concerns worldwide.
In the past four weeks, U.S. crude oil inventories have surged by nearly 18 million barrels. This increase, coupled with a slight 0.2 million barrel rise in the Strategic Petroleum Reserve (SPR), has raised eyebrows among market analysts and organizations such as OPEC+. Despite these gains, the SPR remains significantly below levels seen before the withdrawals initiated during the Biden Administration.
The geopolitical landscape has added complexity to the oil market dynamics. A drone attack on a Russian pumping station has severely affected oil flows through the Caspian Pipeline Consortium (CPC), a critical route for Kazakhstan's crude exports. Russia reported a 30-40% drop in oil flow through CPC after the attack, underscoring vulnerabilities in global oil supply chains.
OPEC+ is closely monitoring these developments, particularly with respect to growing U.S. stockpiles. The organization is concerned about President Trump's pledge to increase U.S. oil exports and reduce global oil prices. There is speculation, based on a Bloomberg report earlier this month, that OPEC+ may consider reintroducing supply in phases to minimize market disruptions.
Within the U.S., economic policies are also influencing the oil sector. The Trump administration's tariffs have prompted some firms to consider price hikes, potentially impacting consumer costs. Such economic maneuvers add another layer of complexity to an already volatile market.
From a technical analysis perspective, Brent Crude Oil's daily chart reveals key insights into current price movements. The price has recently reached a critical area just above the $77.00 mark, with immediate support provided by the 100-day moving average (MA) at $75.41, just above the psychological $75.00 level. Resistance is observed at the 200-day MA, which rests at $77.91.
Market analysts note that the 14-day Relative Strength Index (RSI) remains just below the 50 level, indicating that bearish momentum persists for now. This technical setup suggests that while there may be periods of short-term fluctuations, overall market sentiment remains cautious amid prevailing geopolitical and economic uncertainties.
Supply fears extend beyond U.S. borders, particularly following the Ukrainian drone attack on the CPC pumping station in southern Russia. Such incidents highlight ongoing geopolitical risks that could further strain global oil supplies, potentially leading to price volatility.