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NEW YORK — Oil markets are heading into the weekend under mounting pressure, with traders watching supply disruptions, geopolitical signals and physical shortages more closely than ever.
Benchmark prices remain volatile, with Brent crude holding above $100 a barrel and West Texas Intermediate pushing toward the same level. The International Energy Agency (IEA) say those headline prices, however, may not fully reflect the severity of the current supply crunch.
Attention is increasingly shifting to the physical oil market, where immediate delivery prices have surged well beyond futures benchmarks, signalling tighter real-world supply. Traders say the gap reflects a market grappling with the loss of significant volumes of crude tied to ongoing disruptions in the Middle East and restricted flows through the Strait of Hormuz.
The IEA has warned the conflict has created the largest energy security threat in history, with millions of barrels per day removed from global supply. Emergency stock releases have helped stabilize markets in the short term, but are not seen as a long-term solution.
At the same time, demand pressures are building. China is expected to return to global markets as a major buyer in the coming weeks after drawing down stockpiles, adding further strain to an already tight system.
Market participants say price swings are also being driven by political developments, particularly statements from U.S. President Donald Trump, which have triggered rapid movements in oil futures. Some traders say the market has become increasingly reactive to headlines rather than underlying fundamentals.
Still, industry observers warn the more important signal is coming from the physical market, where refiners are competing for limited supply and adjusting operations to manage shortages.
Heading into the weekend, traders say the key factors to watch include any changes to shipping access through the Strait of Hormuz, further geopolitical developments in the region and signs of additional supply losses or recovery.
Longer term, concerns remain over how quickly production can return and whether global supply chains can adjust. Even if disruptions ease, analysts warn elevated prices and volatility could persist for months as markets work through the imbalance.
For consumers and businesses alike, the underlying concern is increasingly clear: the current volatility may be only the beginning of a broader adjustment in global energy markets.
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