Geopolitical tensions, particularly between Ukraine and Russia, are exerting upward pressure on oil prices, as recent drone attacks on Russian oil facilities have heightened concerns over potential supply disruptions. These developments are occurring in a market already sensitive to debates about a supply glut, with geopolitical risks playing a significant role in the current rally. According to a Bloomberg Economics model, supply-side shocks, especially those of a geopolitical nature, are key drivers of crude's gains this year.
Additionally, January's seasonal patterns, which typically favor higher oil prices, are contributing to the upward momentum. If these macroeconomic drivers persist, the market could witness a sustained rally by the end of the month. As of 07:17 on January 8, the price of Brent crude oil stands at $77.36, up from its last close of $77.05, reflecting the ongoing impact of geopolitical and seasonal factors on the market.