Crude oil prices experienced a significant uptick on Wednesday, March 12, 2025, with Brent crude reaching approximately US$71.00 per barrel and West Texas Intermediate (WTI) hovering near US$67.80.
This surge of over 2 per cent is primarily attributed to an unexpected decrease in US crude oil and fuel inventories, indicating robust market demand.
The reduction in gasoline and distillate reserves has further bolstered the price increase, reflecting heightened activity in key sectors such as transportation and industry.
This development suggests strong energy consumption, which could potentially sustain higher prices in the near term.
A weakening U.S. dollar has also contributed to the price surge, making crude oil more attractive to buyers using other currencies.
As the dollar continues to lose value, crude prices are likely to maintain their upward trajectory in the short term.
However, market analysts remain cautious due to persistent risks that could impact market stability.
Concerns over a potential US recession, global economic uncertainty, and ongoing trade tensions have tempered optimism.
These factors could potentially curb demand growth and limit future price increases, affecting investment decisions in the energy sector.
The Organization of the Petroleum Exporting Countries (OPEC) has maintained its global demand growth projection, driven primarily by increased travel and fuel consumption.
Meanwhile, OPEC+ countries have slightly increased production, with Kazakhstan leading the supply growth.
Geopolitical tensions continue to play a crucial role in crude oil market volatility.
Economic sanctions, conflicts in oil-producing regions, and policy decisions by major powers can significantly influence global crude supply.
As the market remains highly volatile, investors and analysts will closely monitor upcoming OPEC meetings and global economic data, which could define the medium-term direction of crude oil prices.
Antonio Di Giacomo, Financial Markets Analyst for LATAM at XS, concludes that while inventory reductions and a weakening US dollar have driven crude prices higher, economic uncertainty and key producer decisions will continue to shape market trends in the coming weeks.
