Geopolitical risks and physical market tightness push oil higher, defying earlier forecasts of a supply glut.
Oil prices have risen for over a week as Middle East hostilities persist, countering recent expectations of a supply glut. The physical market now signals tightness, reinforcing a higher-for-longer price outlook.
Earlier this month, analysts warned of an impending oil surplus as traffic through the Strait of Hormuz rebounded following a U.S.-Iran ceasefire. However, the truce collapsed, surprising forecasters and disrupting supply expectations.
The breakdown in stability has reversed earlier bearish sentiment, with traders now pricing in sustained upward pressure on crude amid persistent geopolitical risks.