Oil traded higher today, although it remained close to its lows for the year.
The market could continue to see some upside as traders react to increasing geopolitical tensions in Eastern Europe.
The latter continues to affect energy infrastructure in the region and could impact oil supply levels in the near term.
Additionally, the region continued to grapple with the lack of a breakthrough in peace talks. At the same time, markets continue to see a low probability of success in implementing a peace deal. As a result, sanctions on Russian crude could remain in place and limit the risks of additional oil supplies arriving on the market.
However, oversupply concerns could still dominate the medium-term outlook. The IEA projects the market to be potentially oversupplied by up to 4 mb/d. In this regard, traders could continue to monitor the development on the production level among major producers, including the US and OPEC. The latter decided to leave output levels on hold during Q1 2026, which could support prices to a certain extent.