Crude oil prices inched up in Tuesday trading as supply risks from geopolitical tensions counterbalanced concerns over slowing global demand.
Brent crude, the international benchmark, was up 0.4 percent to trade at $79.86 per barrel, while U.S. West Texas Intermediate (WTI) rose 0.3 percent to $76.08, extending Monday’s modest gains.
Traders cited persistent uncertainty surrounding Russia’s exports after recent Ukrainian drone strikes on fuel infrastructure and fears of potential escalation in the Middle East as key factors supporting prices above the $75–$80 band.
Despite the uptick, analysts warned that lacklustre economic data from China and Europe continued to cap major price rallies. China’s latest factory output figures came in below expectations, suggesting weaker demand in the world’s largest crude importer.
At the same time, eurozone manufacturing activity remains subdued, dampening prospects for a strong uptick in fuel consumption. However, prices remain underpinned by U.S. fuel stockdraws and expectations that OPEC+ will maintain voluntary production cuts through the remainder of the year to keep the market balanced.
Meanwhile, U.S. shale output is projected to decline slightly next month, according to the Energy Information Administration, which also reported a surprise drop of nearly 4 million barrels in U.S. commercial crude inventories last week.
Analysts believe inventory tightness could offer further near-term support if disruptions persist. Goldman Sachs maintained its year-end Brent forecast at $82, noting that while downside risks remain from weak macro conditions, any major supply shock could quickly lift prices back above $90.
For import-dependent economies like Kenya, the current oil stability offers only temporary relief, with any escalation in geopolitical flashpoints posing a risk of renewed price spikes.
Traders are now eyeing upcoming U.S. inflation data and the next OPEC+ policy meeting for direction, signalling that the market could be poised for sharper moves if either supply or demand dynamics shift more aggressively.
Written By Ian Maleve
