By Giulia Petroni

Here's a look at what happened in oil markets in the week of Feb. 10-14 and what the focus will be in the days to come.

OVERVIEW: Oil prices have been pulled by opposite forces this week amid U.S. President Trump's tariff plans and talks with Russia's Vladimir Putin to end the war in Ukraine. Brent crude and West Texas Intermediate trade just shy of $75 and $71 a barrel, respectively. Both benchmarks are down roughly 7% on the month.

MACRO: Hotter-than-expected inflation data in the U.S. has been weighing on market sentiment this week, upholding the Federal Reserve's more cautious stance on interest-rate cuts. The latest figures showed consumer prices rose by a faster-than-expected 3% in the 12 months through January, marking a pickup from December.

The U.S. central bank cut rates three times between September and December by a full percentage point before signaling last month it would take a wait-and-see approach to future cuts. Higher rates typically boost the U.S. dollar, making commodities like oil more expensive for holders of other currencies.

GEOPOLITICAL RISKS: Trump and President Putin agreed earlier this week to open talks to end the war in Ukraine, raising prospects of lower supply risks and speculation over a potential easing of restrictions on Russian producers. The news put pressure on oil, but some analysts say the move might be premature.

"Apart from a brief drop in production shortly after the start of the war, there was no significant impact on the Russian oil supply during the almost three-year war," Commerzbank's Carsten Fritsch said. "This is because Russia was able to sell its oil to India and China at a discount and use its shadow fleet to circumvent Western sanctions, such as the $60 price cap."

Prices have also been pressured by fears that escalating trade tensions could hurt global economic growth and oil demand, with the market finding temporary relief in Trump's decision to delay immediate plans for reciprocal tariffs.

On the Iranian front, Treasury Secretary Scott Bessent said in a Friday interview with Fox Business that the U.S. aims to squeeze Iranian oil exports as part of its "maximum pressure" strategy. "We are committed to bringing the Iranians to going back to the 100,000 barrels-a-day of oil exports," from the 1.5 million-1.6 million barrels a day they currently export, he said.

SUPPLY AND DEMAND: All the main forecasting agencies--the Energy Information Administration, OPEC and the International Energy Agency--released their monthly oil market reports this week.

The EIA's crude oil price estimates were little changed from those of the previous report, with Brent forecast to average $74 a barrel this year and $66 a barrel the next. WTI is forecast at $71 and $62 a barrel on average in the same periods.

OPEC stuck to its oil-demand forecast, while the IEA slightly lifted its estimates and lowered expectations for a projected global oil surplus this year, providing further support to market sentiment. The Paris-based agency also said Russia's revenue from the export of crude and other oil products rose last month despite Western sanctions, and lowered its 2025 projections for Russian oil production only by a modest 150,000 barrels a day.

Meanwhile, the latest EIA weekly data showed U.S. crude oil stocks rose by 4.1 million barrels last week, well above expectations of a 2.4-million-barrel increase, signaling weaker demand in the world's top crude consumer.

WHAT'S AHEAD: Monday is expected to be quiet, with U.S. markets closed for Presidents Day.

Traders' focus will remain on U.S. tariff plans and negotiations for a peace deal with Ukraine. "It is not clear yet when, or if at all, existing sanctions on Russia's energy sector will be rolled back," Capital Economics' Ankita Amajuri said. "But a kick-off in peace negotiations should at least ease concerns about Trump imposing even harsher sanctions on Russian oil, thus reducing one potential upside risk for oil prices."

OPEC+'s next policy moves are also in the spotlight, with market watchers waiting to see if the alliance will stick to its plan to gradually increase output from April.

Some say the trade turmoil could push the cartel and its allies to further extend existing production cuts, while others say they might decide to raise output to offset any potential losses resulting from U.S. sanctions.

Write to Giulia Petroni at giulia.petroni@wsj.com

(END) Dow Jones Newswires

February 14, 2025 12:53 ET (17:53 GMT)

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