Crude oil benchmarks are on track for a second consecutive week of gains, but the market story is mixed: supportive monetary policy meets weakening product-demand signals and geopolitical headlines. Below I break down the data, the drivers, and what this means for traders, refiners and energy investors.
Brent and WTI edged higher on the week as the Federal Reserve’s rate cut gave the market a boost, but rising U.S. distillate inventories and soft demand indicators capped upside while geopolitical strikes and political comments added volatility.
Benchmarks: At the time of reporting Brent traded around $67–68/bbl and WTI around $63–64/bbl — levels consistent with a modest weekly rally.
Monetary policy: The U.S. Federal Reserve’s 25 bps rate cut was a bullish macro signal for commodity demand expectations, and helped underpin the move higher. However, much of that effect was already priced in.
Inventory signals: U.S. data showed a larger-than-expected build in middle distillate stocks (diesel/heating oil), which raised questions about near-term refining demand and capped gains. Reuters/EIA reporting confirms a surprise distillate build that pressured prices.
Geopolitics: Attacks on Russian refineries by Ukrainian forces and political comments about Russia’s sanctions policy added headline risk — though some official denials and comments reduced fears of long-lasting supply disruption.