On Wednesday, February 28, WTI crude futures experienced a slight decline, landing at $78.5 per barrel. This adjustment occurred as market traders juggled the escalating U.S. crude reserves along with the conjecture about an extension of supply curtailments by OPEC+. As per the latest report by the EIA, the preceding week demonstrated a rise in U.S. crude oil inventories by 4.199 million barrels, surpassing expectations. However, it’s worth noting that this is considerably less than the 8.428 million reported by the API. 

The surge in barrel supplies is chiefly connected to a deceleration in the conversion processes at refineries, which transforms crude oil into end products. As we look towards the future, market players are keenly anticipating the upcoming OPEC+ meeting scheduled for March. The gathering will bring to the table discussions related to the extension of output reductions. 

The general prediction is that oil producers will adhere to optional limitations on production at least until the Ministerial Meeting in June. This measure aims to retain equilibrium in the market. Moreover, other factors contributing to fluctuations in oil prices include the ambiguity tied to the cease-fire between Israel and Hamas and the continuing attacks by Houthi on shipping activities in the Red Sea. These geopolitical considerations introduced an additional risk premium to oil prices. 

(WTI Crude Six-month Chart) 

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