Global oil prices fell after several days of growth as investors reacted positively to the implications of the UAE's unexpected decision to exit OPEC.
Brent crude oil futures for June delivery fell by 1 cent to $111.25 per barrel after rising for the previous seven sessions. The June contract expires on Thursday, while the more actively traded July contract decreased by 28 cents to $104.12.
The slight decline on Wednesday may be partially related to the UAE's decision to exit OPEC, said senior analyst at LSEG, Anh Pham, as it indicates stronger supply prospects when the country frees itself from the group's production quotas.
"However, this effect is not immediate, as additional barrels may not be available in the near term due to the ongoing blockade of the Strait of Hormuz," he added.
He also noted that although prices have slightly decreased, this seems more like a correction compared to the previous rise, as Brent crude oil remains around $110 per barrel.
"The recent rise in oil prices was due to the blockade of the strait. If (U.S. President Donald - ed.) Trump is willing to continue the blockade, supply disruptions will worsen further and continue to drive oil prices up," said Yan An, an analyst at Haitong Futures.
According to experts, crude oil inventories fell by 1.79 million barrels over the week. Gasoline stocks decreased by 8.47 million barrels, while distillate stocks dropped by 2.60 million barrels.
The oil market is currently on edge: prices seem to have slightly retreated but remain high overall and are ready to rise again at the slightest escalation of the situation. The news of the UAE's exit from OPEC adds intrigue, but in the near term, it does not change the landscape — additional volumes are not yet in sight.
The main pressure factor is geopolitics. As the bb.lv portal reports, as long as tensions around the Strait of Hormuz and supply disruption risks persist, the market will remain "on edge." This is compounded by declining inventories, which only heightens the sense of scarcity.
In simple terms, oil is not falling right now — it is taking a pause. And if the risks do not disappear, the next wave may rise again.
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