Oil Prices Settle Close to $90 Despite Rising Geopolitical Risk

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The oil markets closely monitored Iran’s retaliatory strikes over the weekend and, at least for the time being, risks of a wider regional conflict have subsided this week, sending Brent back to $90 per barrel. There are still plenty of bullish factors to look out for, most notably the price might swing up should the US decide to sanction Venezuela again, a decision due on April 18th.

Bouncing back from the loss of Angola, the OPEC+ oil group is actively courting Africa’s Namibia, a country yet to produce oil but set to rise to 700,000 b/d by 2030, seeking to get Namibian authorities to join its Charter of Cooperation just like Brazil did, OilPrice.com reports.

ADNOC, the national oil company of the United Arab Emirates, has reportedly considered buying UK oil major BP (NYSE:BP) after the 110 billion company underperformed its competitors for years, but talks did not progress beyond preliminary discussions.

Powered by India’s stellar economic growth, the country has mandated coal-fired power plants to guarantee maximum electricity output until 15 October, poised to lift coal imports as temperatures are expected to be higher than average in the summer.

Shale oil producers might be facing further restrictions on saltwater disposal after a 4.4 magnitude earthquake shook Midland after the Railroad Commission of Texas already developed guidelines to avoid tremors over magnitude 3.5.

The US and the United Kingdom banned metal-trading exchanges from accepting new aluminum, copper, and nickel produced in Russia, simultaneously prohibiting the imports of those metals into the two countries, impacting the LME and CME.

Nigeria’s electricity grid collapsed for the fifth time this year already, just two weeks after the African country’s Tinubu administration raised power tariffs for wealthier consumers by 230%, trying to scrap the $2.6 billion worth of subsidies for the sector.

Money managers and other hedge funds have built up one of the largest bullish positions in US gasoline futures as sticky inflation and higher oil prices keep the pressure on gas prices, with net length rising to 84,926 contracts for Nymex RBOB, the highest since January 2021.

Citing bad weather and heating season requirements, Kazakhstan admitted it exceeded its OPEC+ oil production quota by 131,000 b/d in March, pledging to compensate for the overproduction over Q3 alongside Iraq.

The US State Department warned Venezuela that the White House would not renew a temporary sanctions waiver on the Latin American country that expires on April 18 unless Maduro shows progress on political rights and fair elections to be held this July.

China’s state-run offshore giant CNOOC (HKG:0883) has been buying up Russia’s ESPO crude into a newly launched reserve base in east China’s Dongying port, boosting the Asian country’s strategic stocks with discounted oil.

The consortium led by ExxonMobil (NYSE:XOM) developing Guyana’s Stabroek block approved the $12.7 billion Whiptail project, the sixth development in the South American country, aiming 250,000 b/d of output starting from 2027.

Copper futures are trading at their highest since June 2022, soaring to $9,650 per metric tonne, after satellite data confirmed that the inactivity of Chinese smelters rose to 8.5%, more than double the 4% rate in Q4 2023.

Following SLB’s $8 billion takeover of ChampionX, oil service giants Halliburton (NYSE:H) and Baker Hughes (NASDAQ:BKR) will see increased pressure to join the buying spree, also buoyed by the US’ slowdown in activity.