Written by: Salma Al-Saqqa
Global energy markets are experiencing uncertainty at the beginning of the week, driven by escalating geopolitical tensions that have led to an increase in the risk premium for crude oil prices. These movements follow a series of attacks that targeted vital energy facilities, raising concerns about the stability of global supplies in light of the current security conditions.
Impact of Geopolitical Tensions on Supplies
Recent attacks targeting energy infrastructure in Saudi Arabia have raised the alert level for market dealers, especially as the scope of risks has widened to include oil facilities in other regions. In parallel, Russian exports face additional pressures due to ongoing disruptions affecting oil terminals and facilities associated with the energy sector, which enhances price volatility and keeps markets in a state of constant anticipation for data issued on global inventories.
Despite these pressures, markets continue to monitor international policy trends and their impact on trade movement, especially with changes in regulatory rules related to energy purchases, creating a delicate balance between supply shortage concerns and shifts in major economic policies.
A Technical Look at Crude and Natural Gas Performance
For US Crude (WTI), the focus remains on inventory levels in the United States, where expectations indicate a potential decrease in reserves, which supports crude prices and maintains the general trend in light of current technical resistance levels. As for Brent crude, it continues its performance within technically defined ranges, seeking to exceed significant resistance levels amidst positive momentum pushing it to stay above key support lines.
Conversely, natural gas is witnessing downward pressure due to milder weather forecasts, which reduces demand for heating, in addition to higher supply levels from domestic production. However, global demand for liquefied natural gas (LNG) remains an influential factor in determining price paths, as the market faces challenges in enhancing strategic reserves in preparation for upcoming seasons, making gas prices susceptible to sharp technical fluctuations in the event of breaking current support levels.
