Outlook
Oil remains supported by OPEC+’s pause on further production increases for Q1 and ongoing supply disruption concerns from sanctions on Russian exports. Geopolitical tensions add a risk premium, while steady demand from Asia helps keep Brent-linked currencies buoyant. The path remains vulnerable to a stronger dollar or softer global growth, which could cap or reverse gains. For OIL currency pairs, sustained oil strength tends to support CAD and NOK more than RUB and BRL in the near term, but all are sensitive to broad USD moves and risk sentiment.
Key drivers
- OPEC+ decision to pause further production increases for the first quarter.
- Geopolitical tensions in the Middle East and sanctions on Russian oil exports.
- Indian refiners increasing imports from Saudi Arabia and Iraq, altering global demand dynamics.
- Oil trading near multi-month highs with notable intraday volatility, shaping expectations for oil-linked currencies.
Range
Brent Crude OIL/USD: 59.04-66.72
OIL/EUR: 50.26-57.03
OIL/GBP: 43.98-49.54
OIL/JPY: 9139-10499
What could change it
- A surprise OPEC+ move to increase production or delay supply discipline.
- Easing tensions or sanctions driving Russian supply back into the market.
- A notable deterioration or improvement in global demand (especially China) altering oil demand prospects.
- A stronger or weaker USD driving risk appetite and commodity funding flows.
