Oil Prices Dip Amid Rising Inventories and Geopolitical Risks

Global oil markets saw mixed movements on February 13, 2025, as traders balanced bearish inventory data against ongoing geopolitical tensions.

Brent crude closed at $75 per barrel, down slightly after testing the $74 support level. West Texas Intermediate (WTI) settled at $71 per barrel, reflecting cautious sentiment in response to rising U.S. stockpiles and global uncertainties.

The Energy Information Administration (EIA) reported a 4.1 million-barrel increase in U.S. crude inventories last week, surpassing expectations of a 3-million-barrel build. This data pressured prices downward, signaling weaker near-term demand.

However, supply risks stemming from sanctions on Russia and Iran helped limit losses. Russia’s January output fell below its OPEC+ quota, while Iranian exports faced tighter restrictions amid escalating U.S. sanctions.

Geopolitical tensions added complexity to the market’s outlook. Ongoing conflicts in the Middle East and threats to the fragile Israel-Hamas ceasefire raised concerns about potential supply disruptions.

Meanwhile, U.S. President Donald Trump’s new “reciprocal tariffs” plan targeting trading partners fueled fears of slower economic growth and weaker oil demand. Despite these headwinds, the International Energy Agency (IEA) offered a more optimistic long-term view.

Oil Market Update

The agency revised its 2025 global oil demand growth forecast upward to 1.1 million barrels per day, citing strong consumption in Asia and increased fuel switching in Europe.

Analysts noted that OPEC+ production cuts have reduced the risk of a supply glut, though non-OPEC supply growth remains robust. Market sentiment reflected this tug-of-war between bearish and bullish forces.

Energy-focused ETFs experienced mixed flows as investors weighed near-term volatility against potential price recovery. Technical analysis showed Brent crude trading in a range of $74-$77 per barrel, with WTI holding between $70-$72.

Standard Chartered analysts highlighted that sanctions on major producers like Iran and OPEC’s restraint could support prices moving forward. However, traders remain cautious as they monitor trade policy developments and further inventory data.

The oil market’s near-term trajectory hinges on geopolitical developments, trade negotiations, and OPEC+ decisions on production adjustments expected in April. For now, rising inventories and global uncertainties continue to keep prices under pressure while limiting sharp declines.

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