Oil Prices Retreat from Recent Highs

Oil prices fell as ceasefire talks between Hamas and Israel advanced, easing geopolitical tensions. West Texas Intermediate (WTI) dropped nearly 1% to $78 per barrel after surging earlier in the week. Progress in negotiations, supported by Qatar and key international leaders, has temporarily stabilized market volatility.

Sanctions on Russian Oil Shake Global Supply Chains

U.S. sanctions targeting Russian oil tankers caused oil prices to spike earlier, but their long-term impact remains uncertain. The sanctions affect about 160 vessels, forcing Asian refiners in India and China to seek alternative supply routes. Despite the disruption, Moscow is expected to find workarounds, alleviating immediate supply concerns.

Traders Anticipate Price Corrections

Algorithm-driven commodity traders indicate that oil may face a pullback after recent overbought conditions. TD Securities strategist Daniel Ghali noted that no further buying momentum is expected from CTAs unless new supply risks emerge. This has tempered the recent rally and allowed markets to reassess.

Canada’s Role in U.S. Oil Imports Under Scrutiny

Alberta Premier Danielle Smith raised concerns about U.S. tariffs under the incoming Trump administration. Canada supplies over 50% of U.S. crude, primarily from Alberta, and the potential lack of exemptions could strain trade relations and impact North American oil markets.

Short-Term Outlook for Oil Prices

While progress in ceasefire talks offers temporary relief, ongoing sanctions and geopolitical risks keep markets cautious. Analysts expect price fluctuations as traders digest the evolving impact of U.S. policies and Middle Eastern tensions.