Crude oil prices experienced a slight decline on Monday as the market awaited the release of the U.S. Energy Information Administration (EIA) report.
Investors are closely monitoring the upcoming report, which is expected to provide key insights into global oil inventories, production levels, and demand forecasts, shaping market expectations for the near future.
Brent crude oil, against which Nigerian oil is priced, was down by 0.93% to trade at $65.97 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped 1.08% to settle at $63.19 per barrel.
The dip follows last week’s significant fluctuations in oil prices, driven by mixed economic data and global supply-demand concerns.
Industry analysts noted that the fall in prices ahead of the EIA report reflects cautious trading with investors holding off on major decisions until they can gauge the potential impact of the report.
“The market remains in wait-and-see mode, with traders keen to assess the EIA’s outlook on U.S. oil stocks, production trends, and the broader supply-demand balance,” said Gabriel Sterne, an energy market analyst at Oxford Economics.
The market’s attention is particularly focused on any signs of tightening or loosening of supply in the wake of global economic conditions and geopolitical developments, including OPEC+ output cuts and U.S. shale production trends.
The EIA’s weekly report, set to be released later this week, is expected to offer clarity on the current state of U.S. oil inventories, which are crucial for price direction in the short term.
Despite the dip, some analysts maintain a positive outlook for oil prices, driven by tightening global supply conditions.
Saudi Arabia’s voluntary production cuts, which were extended to maintain market stability, continue to support prices, though rising concerns over global economic slowdowns, particularly in major economies like China and the U.S., add uncertainty.
In addition to the EIA report, market participants are also keeping an eye on broader macroeconomic indicators, including inflation data and central bank policies, which could influence energy demand and ultimately oil price trajectories.
The market remains highly sensitive to these factors as investors weigh the potential for both global economic growth and stagnation.
As the EIA report looms, oil prices are expected to remain volatile, with traders closely watching for any signs of significant shifts in inventory levels or demand forecasts that could trigger a more pronounced market reaction.
With prices still hovering near the $65-per-barrel range, analysts are divided on the near-term outlook, with some anticipating further price dips if the EIA data points to higher-than-expected oil stocks in the U.S., while others expect the market to rebound if the report confirms tightening global supplies.
As the week progresses, the market’s focus will undoubtedly remain on the EIA’s findings, which could either confirm or challenge the prevailing market sentiment, guiding oil prices in the days ahead.