Market Analysis

Oil prices were set to record a modest weekly gain as futures remained within a narrow range, with a focus on supply dynamics and inflation expectations. Brent crude traded above $83 per barrel following a two-day increase that saw futures rise by about 1%, while West Texas Intermediate hovered around $79. Recent sessions have seen lower US crude inventories and indications of easing US inflation competing with forecasts of weaker demand growth from groups like the International Energy Agency.

The week's price movements have been subdued, as these conflicting factors balanced each other out. This resulted in the narrowest weekly range for Brent since March, with prices closely tracking the 100-day moving average. Analysts point to a complex market environment where demand and supply forecasts from organizations such as OPEC and the IEA present mixed signals.

Priyanka Sachdeva, senior market analyst at Phillip Nova Pte, described the current market backdrop as a puzzle of conflicting predictions, noting that softer US inflation data has not clarified the Federal Reserve's future interest rate decisions. Despite being higher year-to-date, oil futures have declined since April amid reduced geopolitical tensions in the Middle East. The upcoming OPEC+ meeting on June 1 is expected to focus on maintaining existing production cuts, with some members advocating for adjustments to their recognized production capacities.

Paraphrasing text from "Bloomberg" all rights reserved by the original author.