Brent Oil Prices Hold Steady Amid Russia-Ukraine Talks, Tightening Fundamentals

Brent oil prices have stabilized between $65-$66 per barrel, with bearish sentiment driven by anticipated Russian oil returning to global markets amid Russia-Ukraine peace talks. However, Rystad Energy’s Mukesh Sahdev highlights upside signals. China’s 10% higher-than-needed oil imports are bolstering storage, reducing the likelihood of prices dropping to $60 per barrel. Despite OPEC+ planning to unwind 2.2 million bpd cuts by September, not all additional barrels will hit export markets, with Middle East refinery runs steady at 9.6-9.8 mbpd. US inventories are expected to show a 3.59-million-barrel draw, remaining 4 million barrels below last year’s levels, signaling tight balances. Canada’s production faces maintenance, and Brazil’s Petrobras adjusts to lower price forecasts. Backwardation persists, and commercial accumulation suggests prices won’t crash. Unexpected trade flows, like India’s diesel exports to China, may further shape markets.