The depletion of US oil inventories has led to a rise in oil prices, as supply levels continue to tighten. Despite the imposition of US sanctions on Russian oil, the market has not anticipated a significant reduction in Russian supply, resulting in a relatively modest geopolitical risk premium of about $2 per barrel. This is a stark contrast to the early days of the Russia-Ukraine conflict, when fears of major supply disruptions pushed the premium to as high as $45 per barrel. The current geopolitical landscape, including a ceasefire between Israel and Hamas, has been largely factored into the market, contributing to the stability in oil prices.
Brent crude is currently trading at $81.80 as of 13:21 on January 15, reflecting an increase from its last close of $79.92. The price movement is supported by the ongoing depletion of US oil stockpiles, marking the eighth consecutive week of declines, and the anticipation that OPEC+ will maintain current production levels until their next review in April.