Brent futures market closed today – here’s a recap of what drove prices this week

The ICE Brent Futures market is closed for trading today on account of Good Friday holiday. Front-month ICE Brent closed at $87.00/bbl on Thursday, which is $0.43/bbl higher than the price at 09.00 GMT on the day.

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Upward pressure:

Brent futures traded firm this week, drawing support from escalating geopolitical tensions.

Ongoing attacks on Russian energy facilities and heightened conflict in the Middle East have bolstered prices. Additionally, failed ceasefire attempts between Israel and Iran-backed Hamas militants have contributed to the upward pressure on Brent's price.

Anticipation of further supply cuts by OPEC+ members ahead of their meeting next week also lifted Brent futures. The oil producers’ group is set to convene a joint meeting on 3 April to deliberate on production levels and potential output reductions.

“Brent has traded to its highest levels since November last year on the back of OPEC+ extending supply cuts, while supply risks have provided further support,” according to analysts from ING Bank.

Downward pressure:

Brent futures felt some downward pressure due to strengthening of the US dollar amid high interest rates.

Higher interest rates make the greenback stronger, which in turn increases borrowing costs for non-dollar currency holders, explained analysts. This situation could potentially accelerate a slowdown in global oil demand growth.

The US Federal Reserve (Fed) maintained its interest rates at the latest Federal Open Market Committee (FOMC) meeting. Analysts anticipate the Fed to further delay rate cuts this year in response to recent robust US inflation figures.

Additionally, a rise in US crude stocks limited Brent's price gains this week. Commercial crude oil inventories in the US increased by 3.17 million bbls to 448 million bbls on 22 March, according to the US Energy Information Administration (EIA).

“As the market prepares for the upcoming Easter holiday [on Monday] and with the oil [Brent] market closed on Good Friday, a shocking build in crude supply might be a bit hard to shake off,” Price Futures Group’s senior market analyst Phil Flynn noted earlier this week.

By Tuhin Roy

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