The oil market is beginning to shift. This latest move upward is a combination of tighter inventories, resilient demand signals and improving diplomatic tone is starting to form a more constructive picture. The forces behind this price rise are layered, they hint at a market finding its footing.
Geopolitical risk remains part of the story, with renewed airstrikes in Gaza adding tension across the Middle East. While direct supply disruption remains unlikely, the perception of risk still influences positioning. More importantly, diplomatic progress between the US and China has injected fresh optimism into the demand outlook.
On the fundamentals side, the data is aligning. US crude stockpiles fell by more than four million barrels last week, while refined products like gasoline and distillates also posted notable declines. This suggests consumption is holding up well, even as the broader macro environment remains mixed.
Looking ahead, OPEC+ is expected to revisit its production strategy, with the market anticipating a gradual increase. While that could ease some of the current tightness, it also signals confidence from producers in the strength of underlying demand. Meanwhile, new US sanctions on selected Russian energy companies have raised questions around medium-term supply dynamics.
Union Jack Oil plc (LON:UJO) is an oil and gas company with a focus on onshore production, development, exploration and investment opportunities within the United Kingdom and the United States of America hydrocarbon sector.
