Last Friday, oil prices slightly declined but still recorded a fourth consecutive week of gains. Brent crude futures fell by 0.6% to $80.79 per barrel despite a 1.3% increase this week. U.S. crude futures fell $0.80, or 1%, to settle at $77.88 per barrel, with a weekly gain of 1.7%.
Sanctions and Supply Tensions
Analysts noted that U.S. sanctions on Russian energy trade have heightened global oil supply uncertainties, particularly straining energy supplies to countries like Europe and India. Phil Flynn, senior analyst at Price Futures Group, stated, "Sanctions on Russia are impacting the global oil market, with supply situations in Europe and India becoming increasingly tense."
These sanctions have caused investors to worry more about the risk of future supply disruptions. Although oil prices dipped on Friday, the overall uptrend remains strong. The Treasury Secretary nominated by President Trump indicated that the new administration might take stricter measures to further intensify sanctions on Russian oil, potentially exacerbating market concerns.
Yemen Situation and Market Demand Impact
Moreover, international situations have also influenced oil prices. With the ceasefire agreement reached in the Gaza region, it is widely expected that the Yemeni Houthi forces will cease attacks on the Red Sea shipping lanes. This change could reduce the risk of supply disruptions in the oil market, although the impact is limited, it still puts some pressure on oil price adjustments.
Meanwhile, the market's interpretation of U.S. inflation data also affected oil price trends. Data shows some alleviation in U.S. inflation, strengthening investor expectations that the Federal Reserve might cut interest rates earlier. This news provided support for the oil market, as the market believes low interest rates will stimulate economic activity and, in turn, increase energy demand.
HSBC Adjusts Oil Price Forecast
Under the dual influences of tight supply and rising demand, HSBC has updated its oil price forecasts. According to HSBC's latest report, the bank raised its 2025 Brent crude price expectation from $70 per barrel to $73, with the first-quarter forecast increased from $70 to $77 per barrel. HSBC stated that this adjustment mainly considers the new U.S. sanctions on Russia and their potential impact on the global oil supply chain.
Despite last week's oil price decline, investors remain cautiously optimistic about the future oil market, with expectations that prices may continue to remain at high levels for a period of time.
