By Antonio Di Giacomo, Senior Market Analyst at XS.com
Crude oil prices recorded a strong rebound in international markets, with Brent advancing toward the $66 per barrel area and WTI trading above $62. This upward move reflects a shift in market sentiment, which quickly moved from caution to greater concern over supply conditions, reviving speculative demand and renewed interest from institutional investors. The primary catalyst behind the rebound has been the impact of severe winter storms in the United States. Extreme weather conditions have forced the suspension of part of production in key regions, disrupting output by close to 2 million barrels per day. This reduction represents roughly 15% of U.S. output, a figure significant enough to temporarily alter the balance between supply and demand. In addition to production losses, several Gulf Coast refineries have been affected, limiting crude processing capacity and heightening concerns about the availability of refined fuels. This situation has pushed prices higher not only for crude oil but also for products such as gasoline and diesel, especially in the North American market. Weather conditions have also driven a seasonal increase in demand for heating fuels. As temperatures have fallen more sharply than usual, energy consumption has risen, reinforcing upward pressure on crude prices and consolidating the rebound seen in recent sessions. However, the outlook is not entirely bullish. On the geopolitical front, tensions with Iran have eased following more conciliatory signals from Washington. This reduction in the immediate risk of disruptions in the Middle East has removed part of the geopolitical premium that had previously supported prices. Meanwhile, Kazakhstan has begun to gradually restart production at the Tengiz oil field, one of the most important in Central Asia. Although initial volumes remain limited and export constraints persist, this resumption introduces a gradual easing of global supply conditions. From a structural perspective, market attention remains focused on the OPEC+ strategy. The alliance, which accounts for more than 40% of global production, is expected to keep output levels unchanged at its upcoming meeting. This stance reflects the delicate balance the group is trying to maintain between avoiding excess supply and supporting prices at levels that are attractive for its member economies.
Recent crude oil price behavior confirms that the market remains highly sensitive to any disruption, whether climatic, political, or strategic. Volatility remains elevated, and each new piece of data on production, inventories, or international tensions can trigger sharp moves within hours. In conclusion, the rebound in crude oil prices is the result of a combination of short- term and structural factors that have revived supply concerns. While the impact of U.S. winter storms has been the primary driver of the recent rally, the market remains shaped by geopolitical developments and OPEC+ strategic decisions. In this environment, crude oil is likely to stay in a phase of high volatility, where any new imbalance between supply and demand will continue to set the direction of prices.