By Giulia Petroni

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

OVERVIEW: Oil prices are set to close the week broadly stable, with Brent crude trading around $70 a barrel and West Texas Intermediate at $67 a barrel. Both benchmarks were lifted by diminishing prospects of an imminent cease-fire in Ukraine, a weaker dollar and cooling U.S. inflation this week. Still, further gains remain capped by mounting concerns over the impact of escalating trade tensions on the global economy and oil demand, as well as fears of an oversupplied market as OPEC+ prepares to raise output next month.

MACRO: The latest U.S. data revealed that consumer sentiment--typically viewed as a forward-looking gauge into spending--slid in March amid high uncertainty surrounding the economy and President Trump's policies. Inflation cooled to 2.8% in February, stoking market expectations of a more accommodative Federal Reserve and providing temporary relief to oil. However, tariffs are threatening to raise prices in the coming months.

GEOPOLITICAL RISKS: A chaotic rollout of U.S. tariffs and escalating threats against trade partners are rattling global markets, putting pressure on oil. In his latest move, President Trump threatened to impose 200% tariffs on alcohol imports from the European Union after the bloc hit back at his levies on steel and aluminum imports.

Meanwhile, talks between U.S. and Ukrainian officials in Saudi Arabia have been under the spotlight this week. Kyiv agreed to an immediate cease-fire, while Russian President Vladimir Putin didn't support the proposal but said he was open to discussing how to end the conflict.

"If no solution is found, sanctions against Russia could be tightened," analysts at Commerzbank Research say. "In any case, it should be noted that the numerous sanctions against the Russian oil industry have not had a lasting impact on supply."

SUPPLY AND DEMAND: The International Energy Agency warned the oil market could face an even bigger-than-anticipated supply surplus if OPEC+ raises output beyond April.

The Paris-based agency forecasts an overhang of around 600,000 barrels a day, but said a further 400,000 barrels a day could be added to the market if OPEC+ will continue to increase production and members' compliance to quotas remains weak. It also said Venezuelan supply is expected to decline from April, when Chevron's license to operate the country expires.

The Energy Information Administration instead cut its forecast for a global oversupply this year, saying it expects U.S. sanctions on Iran and the revocation of licenses for Venezuelan oil to tighten near-term balances.

The Organization of the Petroleum Exporting Countries stuck to its oil-demand outlook and economic growth estimates, but said overall crude production rose last month. In particular, Kazakhstan's output rose by almost 200,000 barrels a day.

Oil found some support in U.S. inventory figures, as the EIA reported that gasoline stocks fell by 5.7 million barrels last week against expectations of a 1.1-million-barrel withdrawal, pointing to robust demand.

WHAT'S AHEAD: Recession fears and any development on the geopolitical or trade front will remain in focus next week. Traders will also turn their attention to China's industrial production figures. "While solid growth is expected for industrial production overall, crude oil processing is in danger of disappointing," Commerzbank analysts say. Meanwhile, the Federal Reserve's monetary policy decision is due on Wednesday. The U.S. central bank is widely expected to keep rates steady, but inventors will be eager for cues on the inflation outlook and borrowing costs.

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

(END) Dow Jones Newswires

March 14, 2025 12:49 ET (16:49 GMT)

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